New Delhi: Prime Minister Narendra Modi has unveiled sweeping “next-generation GST reforms,” or GST 2.0, aimed at easing the tax burden and giving consumers festive relief by Diwali 2025. The overhaul will simplify the existing four-tier system into just two main slabs—5% and 18%—with a special 40% rate for luxury and sin goods like tobacco and alcohol. Under the re-slabbing, nearly 99% of items currently taxed at 12% will move to 5%, while most products in the 28% bracket are expected to shift to 18%. This means a wide range of goods will become cheaper, including groceries, packaged foods, household items, furniture, bicycles, and kitchenware, along with electronics like TVs, air conditioners, refrigerators, washing machines, and mobile phones, which may see price cuts of up to 8–10%. Even services such as insurance, education, and healthcare products like medicines and diagnostic kits are likely to benefit. Experts believe this reform is both timely and strategic, expected to boost consumption, stimulate the economy, and support MSMEs during a period of global economic uncertainty.
