Daybreak All you need to know about GST 2.0
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Sep 4, 2025 India is set for a major overhaul of its Goods and Services Tax, introducing a new structure aimed at simplifying compliance and slashing costs. The changes will affect everything from everyday essentials to luxury cars. However, some states are raising concerns about potential revenue losses, while economists debate the design's effectiveness. Market reactions are already visible, with key sectors experiencing significant shifts. The discussion highlights who stands to gain and who may be left behind in this ambitious tax reform.
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Two Main GST Slabs Introduced
- India moves from four GST slabs to two main ones: 5% and 18%, plus a 40% luxury slab.
- The change aims to simplify taxes and reduce confusion over everyday items.
Widespread Cuts For Essentials And Durables
- Many essentials drop sharply in tax rates, with staples and personal care items mostly moving to 5% or zero.
- Larger durable goods and small cars move from 28% to 18%, while EVs stay at 5%.
Some Items Get Costlier
- Not all items get cheaper: sugary aerated drinks jump to 40% and coal rises to 18%.
- Luxury cars, tobacco and paan masala will move to 40% after pending dues are cleared.