GST 2.0 – India’s Big Tax Reset
BY: PRAGATI UPADHYAY
From September 22, India moves to a simpler GST—just two main slabs: 5% & 18%. Luxury/sin goods will be taxed at 40%.
GST 2.0 Is Here!
Household staples, food items, and daily needs now fall into the 5% slab (down from 12–18%).
Essentials Become Affordable
Nearly
60% of commonly used items
are shifted into the lower 5% category—major relief for middle-class families.
60% Of Goods Now Under 5%
Life and health insurance premiums will now be
completely tax-free
. A real boost to financial security.
Insurance At 0% GST
Appliances like ACs, TVs, and washing machines drop from
28% → 18%
. Savings of
up to 10%
for buyers.
Electronics Get Cheaper
Mid-segment cars shift from
28% → 18%
, making them
10% cheaper
. Luxury cars, however, still face
40% GST
.
Cars Become Affordable
Cigarettes, gutkha, aerated drinks: all taxed at 40%+. High rates meant to discourage harmful consumption.
Sin Goods Stay Expensive
Rollout begins
22 September 2025
. Expect price changes to reflect in markets soon after.
When Does It Start?
Economists expect
1–1.2% GDP growth
as consumption rises and industries benefit from lower taxes.
GDP Gets A Boost