A Landmark Overhaul of India's Tax System
On September 3, 2025, the 56th GST Council approved a historic reform, simplifying the Goods and Services Tax structure. This move, effective September 22, 2025, aims to ease compliance, boost consumer spending, and stimulate economic growth by restructuring the tax slabs that affect countless goods and services.
Simplified Structure
The complex four-tier system (5%, 12%, 18%, 28%) is now a simpler two-rate structure (5%, 18%) plus a special 40% slab for luxury/sin goods.
Consumer Relief
Rates are slashed on hundreds of daily essentials, food items, and household goods, putting more money in the hands of the middle class.
Institutional Reform
The GST Appellate Tribunal (GSTAT) will be operationalized to streamline dispute resolution and reduce litigation backlogs.
Economic Stimulus
By making goods cheaper and simplifying compliance, the reform aims to boost domestic consumption and support key sectors like auto, FMCG, and construction.
Visualizing the New Slab Structure
OLD STRUCTURE
NEW STRUCTURE (GST 2.0)
What's Changed? An Interactive Guide
Explore the specific changes across various categories. Use the filters below to see which items have become cheaper, tax-exempt, or fall into the new standard and luxury slabs. You can also view the impact on key economic sectors.
Sector-Specific Rate Changes
The Fiscal Impact on States
While the reforms promise consumer benefits, they pose a significant fiscal challenge for state governments. Projections for annual revenue loss vary widely, raising concerns about funding for welfare and development programs.
Voices & Views: Reactions to the Reform
The landmark decision has drawn a spectrum of reactions, from enthusiastic praise for its pro-consumer stance to cautious questions about its timing and fiscal consequences. Here's a look at what political leaders and industry experts are saying.
Political Commentary
"A gift that would enhance the ease of living and business... a historic decision."
- Govt. Officials (S. Jaishankar, A. Vaishnaw)
"Welcome but 8 years too late... what drove the government to make the changes now? Sluggish growth? Rising household debt?"
- P. Chidambaram (Congress)
"A victory for common people... achieved after sustained pressure on a tone-deaf regime that only listens when forced."
- All India Trinamool Congress (TMC)
Industry Sentiment
FMCG & Durables
Optimistic that lower taxes on daily essentials and appliances will make them more affordable and stimulate demand, especially in rural areas.
Automobiles
The sector is a major beneficiary, with analysts predicting a rise in vehicle sales and improved profit margins due to cuts on small cars and motorcycles.
Hotel & Tourism
Welcomed the GST reduction on mid-range hotel rooms, expecting a boost in domestic tourism and greater accessibility for the middle class.
