GST 2.0 Reforms – New GST Rates 2025

The Goods and Services Tax (GST) Council has announced a landmark reform in India’s indirect taxation system. GST was introduced in 2017 to replace a single, transparent tax system across India with a multiple tax system. The four different rates – 5 %, 12%, 18%, and 28% on the goods and services confused the common man. The reform has simplified the tax system into two major slabs: 5% and 8%, and a 40% rate for luxury goods and services, as well as harmful goods. The new reform is intended to boost the consumption by 60% of India’s Gross Domestic Product (GDP). For a common man, this means cheaper groceries, medicines, household goods, and educational supplies and at the same time, the new GST rates that luxury goods, cars, carbonated drinks, tobacco, and gambling attract the highest tax possible.