Prime Minister Narendra Modi spoke to the nation on the eve of Navratri to announce the introduction of GST 2.0, a significant revision to the country’s Goods and Services Tax system. In order to alleviate household financial strain and increase India’s attractiveness to investors and businesses, the Prime Minister referred to the program as the beginning of a “Bachat Utsav”—a festival of savings. The GST Council approved a simpler two-tier GST structure earlier this month, which forms the basis of the revisions.
Commencing on September 22, the first day of Navratri, the new system will levy tax rates of 5% and 18%. Approximately 90% of commodities that were previously in the 28% slab will now be in the 18% tax bracket, while nearly 99 percent of goods that were previously taxed at the 12% bracket will now be in the 5% bracket. However, luxury and sin items will still be subject to a 40% compensation cess. In order to eliminate the complexity of many levies that previously drove up expenses and put a burden on household budgets, PM Modi emphasized the joint efforts of the Center and states to unite India under the principle of “one nation, one tax.”
India’s Prime Minister, Narendra Modi, has outlined GST 2.0 as a “double bonanza” for citizens, making essentials more affordable and increasing household savings. The tax reforms are linked to the Union Budget’s decision to make income up to ₹12 lakh tax-free, aiming to ease the burden on India’s growing middle class. The tax overhaul is projected to save over ₹2.5 lakh crore in a single year, accelerating India’s growth story and creating a fairer marketplace across all states.
