GST 2.0 is a restructured tax framework introduced by the GST Council, featuring a simplified two-rate system of 5% and 18%, with exemptions for essentials. It replaces the earlier multi-slab structure and introduces a 40% rate for sin and luxury goods. GST 2.0 is expected to make tax filing easier and improve revenue flow, setting the stage for future reforms.
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GST 2.0 Impact | Abhishek Jain
Abhishek Jain in conversation with moneycontrol.com on GST 2.0
GST - Webinars & Webcasts
Webinar on GST rate rationalisation – Key takeaways from the 56th GST council meeting
Internal speakers:
- Abhishek Jain, Partner and Head, Indirect Tax, KPMG in India
- Vivek Johri, Senior Advisor, Indirect Tax, KPMG in India
- Anshul Aggarwal, Partner, Indirect Tax, KPMG in India
Date of webinar: 05 September 2025
Driving growth with GST trends
- GST rate rationalisation
- GST 2.0: Roti, Kapda Aur Makan Relief
- GST regime creates stark divide
- GST: Steady Growth, Reform Ahead
The GST rate rationalisation is a very good move, especially in the current context of US tariffs which have caused stressed in certain sectors and the overall economy. The rate reduction from 12% to 5% and from 28% to 18% is likely to drive comsumption. In addition, consumers are likely to benefit from reduced prices of most goods due to competitive pricing.
GST on namkeens and biscuits reduced from 18% to 5%, making a ₹100 grocery basket nearly ₹11 cheaper. Everyday staples like UHT milk, paneer, pizza bread, rotis and parottas are now tax-free. Shampoo and toothpaste now attract just 5% GST, down from 18%.
Urban families may save 7–8%, rural 5–6%. Once branded the “Gabbar Singh Tax,” GST is now the “Great Savings Tax".
The new GST regime, effective from September 22, reduces GST on sub-350 cc motorcycles from 28% to 18%, making mid-capacity bikes cheaper by up to ₹20,000. But motorcycles 350 cc and above now attract a steep 40% GST, raising prices of Royal Enfield, KTM, Triumph, and Harley-Davidson models by up to ₹40,000.
Industry experts call the move a puzzling anomaly. The hike may slow premiumisation, while sub-350 cc models gain traction. Policymakers are treating larger bikes as luxury goods, even though they play a role in tourism, lifestyle, and exports.
GST collections rose 6.5% in August to ₹1.86 lakh crore, marking the eighth straight month above ₹1.8 lakh crore. Though growth slowed, net revenues jumped nearly 11% after refund adjustments.
Large states led the surge, while Northeast and Andaman & Nicobar showed inclusive gains. Experts say strong domestic demand and stable collections give policymakers confidence to push GST 2.0 reforms.
