GST 2.0: India's tax overhaul lands in 2025
Big changes are coming to how we pay taxes in India—GST 2.0 launches September 22, 2025.
The current four-rate system is getting trimmed down to three: essentials at 5%, most goods at 18%, and luxury or "sin" items like aerated drinks, luxury cars, or yachts at a steep 40%.
It's all about making things simpler and clearer.
What's actually changing?
The GST Council just confirmed that the confusing middle slabs (12% and 28%) are out.
Everyday stuff—think medicines, soaps, toothpaste, even beauty services—will now be taxed less at just 5%.
Only tobacco products will keep that extra compensation cess; for most things, it's gone.
Why should you care?
If you run a small business or dream of starting one, GST 2.0 could make life easier with pre-filled returns and quicker registration.
Lower costs for industries like textiles and food mean more cash flow—and hopefully more jobs—as the economy gears up for growth into next year.