GST 2.0 Reform Bill: India’s New Tax Era (2025)
Effective September 22, 2025 | Simplified Rates, Cheaper Essentials, Faster Refunds
Cheaper!
Essentials, healthcare, farming & education are now at lowest rates.
Costlier!
Tobacco, luxury vehicles, sugared drinks, and sin goods taxed at 40%.
Simpler!
Online returns, instant registration and faster refunds for small business.
0%
GST on Essentials & Insurance18%
GST on Standard Goods & Services40%
GST on Luxury & Sin Goods| Category | Old GST Rate | New GST Rate |
|---|---|---|
| Hair oil, shampoo, soap, toothpaste | 18% | 5% |
| Butter, ghee, dairy | 12% | 5% |
| Health & Life Insurance | 18% | Nil |
| Small cars, bikes, ACs, TVs | 28% | 18% |
| Luxury cars, tobacco, sin goods | 28% | 40% |
Click here for more details about GST compliance changes
- Pre-filled GST returns for faster filing
- Easy online GST registration
- Refunds processed faster for MSMEs
- New invoice formats for FY 2025–26
- Uniform 18% GST on used cars (margin value)
- Biometric authentication for directors at GST Suvidha Kendra
GST 2.0 at a Glance: Cheaper essentials, costlier luxury & sin goods, simpler compliance
GST Revenue (2022 Example)
Monthly GST revenue fluctuation (2022), showing growth trend
Source: Indian Government
