The Union Government’s overhaul of the Goods and Services Tax (GST), dubbed ‘GST 2.0’, came into effect on Monday, September 22 coinciding with Navratri.

Prime Minister Narendra Modi, posted on X (formerly Twitter), and described the rollout as the beginning of a ‘GST Savings Festival’. The new tax regime is being framed as a step towards economic self-reliance, and the promotion of indigenous manufacturing. “This Navratri is particularly special. With the GST Savings Festival, the mantra of Swadeshi (Made in India) will be further energised,” PM Modi said.

“Let us unite in our efforts towards the vision of a developed and self-reliant India.”

What is in store?
Approved at the 56th GST Council meeting earlier this month, the reform reduces the existing four-slab structure of 5%, 12%, 18%, and 28% to two primary slabs of 5% and 18%, with a separate 40% ‘demerit rate’ for luxury and sin goods such as tobacco and high-end vehicles, according to a report by The New Indian Express.

The revised structure lowers taxes on essentials such as ghee, paneer, butter, dry fruits, jam, ketchup, snacks, coffee, and ice cream, as well as certain consumer durables, including televisions, washing machines, and air conditioners.

Finance minister says...
Finance Minister Nirmala Sitharaman said the move could add Rs 2 lakh crore to the economy by boosting savings, consumption, and compliance. The move, she said, was aimed at reducing compliance burdens for businesses while improving revenue buoyancy through enhanced compliance and widening of the tax base.

In his 19-minute address on Sunday, the PM said the poor, middle class, farmers, youth, women, and small traders would benefit most. He urged states to strengthen local manufacturing under the banners of Atmanirbhar Bharat (self-reliant India) and 'Swadeshi' (indigenous).Meanwhile, the opposition dismissed the reforms as cosmetic, describing them as a “band-aid on deep wounds” and demanded an apology for taxing essentials under the original framework.