Introduction: GST 2.0 Launches Alongside Sharadiya Navratri
From today, India steps into a new era of taxation with the implementation of GST 2.0, coinciding with the beginning of Sharadiya Navratri 2025. The government has rolled out its first-ever GST Savings Festival, a reform initiative announced by Prime Minister Narendra Modi during his recent national address.
As declared earlier by Finance Minister Nirmala Sitharaman, these comprehensive reforms aim to streamline GST rates across the board, reducing costs on a wide range of essential and lifestyle products while introducing modest increases on a few selected items.
Key Highlights of GST 2.0
New GST Structure
Under GST 2.0, only two slabs remain active—5% and 18%, eliminating the earlier clutter of multiple tax brackets. Additionally, numerous essential goods and services have been moved to zero-tax categories.
Zero GST on Essential Items
The government has completely eliminated GST on a variety of essential goods, particularly food and education-related items.
Major Food Products Now Tax-Free or Reduced
| Item | Earlier GST | New GST |
|---|---|---|
| Pizza bread, Khakhra, Chapati, Roti | 5% | 0% |
| Vegetable oils and fats | 12% | 5% |
| Dairy (butter, ghee, cheese) | 12% | 5% |
| Sugar | 12–18% | 5% |
| Soy milk | 12% | 5% |
| Meat, fish, and food products | 12% | 5% |
| Cocoa powder, chocolate | 18% | 5% |
| Biscuits, corn flakes, noodles, pasta | 12% | 5% |
| Fruit juices, coconut water | 12% | 5% |
Daily Use Products: Prices Slashed
Everyday household goods have also witnessed major price cuts:
| Item | Earlier GST | New GST |
|---|---|---|
| Hair oil, toothpaste, talcum | 18% | 5% |
| Soaps and shaving products | 18% | 5% |
| Candles, umbrellas, erasers | 12–18% | 5% or 0% |
| School supplies (notebooks, pencils, maps) | 5–12% | 0% |
| Baby care (diapers, napkins) | 12% | 5% |
Electronics and Appliances: Now More Affordable
Several high-ticket electronics have become cheaper:
| Item | Earlier GST | New GST |
|---|---|---|
| Air conditioners, dishwashers | 28% | 18% |
| LED/LCD TVs, monitors, projectors | 28% | 18% |
Agricultural Products: Boost to Farmers
To support the farming sector, equipment and machinery now attract only 5% GST:
| Item | Previous GST | New GST |
|---|---|---|
| Tractors over 1800cc | 12% | 5% |
| Tractor tyres, hydraulic pumps | 18% | 5% |
| Drip irrigation, composting machines | 12% | 5% |
| Bio-pesticides, micronutrients | 12% | 5% |
Health Sector: Affordable Medical Care
Significant GST reductions have been made in the healthcare sector:
| Item | Previous GST | New GST |
|---|---|---|
| Health & term insurance | 18% | 0% |
| Medical kits, thermometers, glucose monitors | 12–18% | 5% |
| Medical-grade oxygen, surgical gloves | 12% | 5% |
| Life-saving rare drugs | 5–12% | 0% |
Automotive Sector: Price Cuts on Bikes, Cars & More
Motor vehicles now come with significantly lower tax rates:
| Item | Earlier GST | New GST |
|---|---|---|
| Small cars (petrol, diesel, hybrid) | Up to 29% | 18% |
| Motorcycles (up to 350cc) | 28% | 18% |
| Large cars, SUVs | Up to 50% | 40% |
| Bicycles, tricycles | 12% | 5% |
Luxury & Sin Goods: Higher Tax for Harmful Products
While essentials became cheaper, some luxury and harmful items saw tax hikes:
| Item | Earlier GST | New GST |
|---|---|---|
| Cigarettes, cigars, tobacco | 28% | 40% |
| Carbonated, flavored, caffeinated drinks | 28% | 40% |
| Beedi (handmade) | 28% | 18% |
Textiles: Cost Effective Clothing
Clothing and textiles now carry a lower tax burden:
| Item | Previous GST | New GST |
|---|---|---|
| Synthetic yarn, staple fibre | 12–18% | 5% |
| Readymade garments (≤ ₹2,500) | 12% | 5% |
| Readymade garments (> ₹2,500) | 12% | 18% |
Construction and Services: GST Slashed
Building Materials
| Item | Previous GST | New GST |
|---|---|---|
| Tiles, bricks, stone | 12% | 5% |
| Cement (all types) | 28% | 18% |
Service Industry
| Service | Previous GST | New GST |
|---|---|---|
| Job work, printing, umbrellas | 12% | 5% |
| Hotel rooms under ₹7,500 | 12% | 5% |
| Movie tickets (below ₹100) | 12% | 5% |
| Beauty parlours | 18% | 5% |
| Casino, betting, race clubs | 28% | 40% |
| Cricket match tickets | 12% | 18% |
Conclusion: A Transformative Tax Reform
GST 2.0 marks a major overhaul in India’s indirect tax system, with a simplified rate structure and a clear focus on relief for the common citizen. Essential goods are now more affordable, while luxury and harmful products bear a greater tax load. With this move, the government aims to boost economic efficiency, ease of compliance, and consumer welfare.
