New Delhi, September 22 — A landmark reform in India’s indirect tax regime came into force today with the rollout of GST 2.0, aimed at boosting consumption and simplifying compliance. The revised framework, dubbed the GST Bachat Utsav (Savings Festival) and coinciding with the first day of Navratri, introduces significant rate cuts on essential items, making everything from groceries to electronics more affordable.
The 56th GST Council, chaired by Finance Minister Nirmala Sitharaman, has rationalised the tax structure by merging the earlier four slabs into two primary categories, along with a special bracket for luxury and “sin” goods:
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5% slab – Essential goods
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18% slab – Most other goods and services
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40% slab – Luxury and sin goods, including tobacco, alcohol, betting, and online gaming
This consolidation is expected to ease tax compliance and substantially lower the cost of items previously taxed at 12% or 28%.
Addressing the nation on Sunday, Prime Minister Narendra Modi highlighted the economic impact of the reform. He said citizens stand to save nearly ₹2.5 lakh crore annually through the combined effect of the GST rate cuts and earlier income tax reductions.
“The GST Bachat Utsav will lead to significant savings and enable people to purchase goods more easily,” PM Modi said, congratulating the nation as GST 2.0 came into effect.
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