India's Goods and Services Tax (GST) regime is undergoing a significant transformation with the implementation of GST 2.0, effective September 22, 2025. This revamped tax structure aims to simplify the indirect taxation system, boost consumer spending, and drive economic growth. Prime Minister Narendra Modi has termed the rollout of GST 2.0 a "GST Savings Festival," emphasizing its potential to benefit the poor, middle class, women, youth, farmers, and small businesses.

Key Changes in GST 2.0

The most notable change in GST 2.0 is the simplification of the tax structure. The previous four-slab system (5%, 12%, 18%, and 28%) has been streamlined into a two-slab system of 5% and 18%. Essential goods and services will be taxed at the lower 5% rate, while most other products will fall under the 18% bracket. A 40% GST slab has been introduced for sin goods, luxury items, and high-end vehicles.

Items Getting Cheaper

GST 2.0 is expected to bring down the prices of a wide range of goods and services. Some key items that will become more affordable include:

• Dairy Products: Milk, butter, cheese, and paneer are among the dairy essentials that will see a reduction in GST, making them more affordable for households. Amul, India's largest dairy brand, has already announced price cuts on over 400 items.
• Home Appliances: Air conditioners, dishwashers, and televisions will now attract a lower 18% GST, reduced from the previous 28%. This is expected to encourage consumers to upgrade their home appliances.
• Automobiles: The GST on automobiles, including cars and two-wheelers, has been reduced to 18%. This is expected to stimulate the automobile market and make vehicles more affordable. Maruti Suzuki has already slashed prices across its models.
• Packaged Snacks: Popular snacks like namkeen and bhujiya will see a decrease in GST from 18% to 5%, making them more affordable for consumers.
• Medicines: The GST on life-saving drugs and essential medical equipment, including thermometers and glucometers, has been reduced to zero. This move is expected to make healthcare more accessible and affordable.
• Other Essentials: Everyday staples like edible oils, packaged atta, soaps, shampoo, toothpaste and hair oil are also set to get cheaper under the revised slabs. Exercise books, pencils, erasers, and notebooks now fall under the 0% GST category.

Impact on Consumers and Businesses

The implementation of GST 2.0 is expected to have a positive impact on both consumers and businesses. Consumers will benefit from lower prices on essential goods and services, leading to increased disposable income and