GST 2.0: Less Complex and Fewer Disputes

The heart of GST 2.0 is a sweeping rationalization of tax slabs. The Council has streamlined the structure into two rates—5% and 18%, along with a 40% rate for ‘sin’ and luxury goods. Compensation cess has been done away with, except on a few tobacco and related items, as a temporary measure. This will have profound implications—less complexity, fewer disputes, and more certainty for businesses and consumers.

- S RAMESH

The true relief, however, lies in the sharp rate reductions announced across key sectors. From roti, paneer, and khakhra to milk and nuts, the effective burden on households will now be drastically lower as many of these goods shift to exemptions or the 5% bracket.

Textiles, a mass employment sector, finally see the correction of inverted duty structures with synthetic yarns and garments down at 5%.

All medicines, except those specifically exempted, and medical devices are now capped at 5%, making healthcare more affordable.

One of the boldest reforms is the complete GST exemption on individual life and health insurance policies, making insurance truly affordable and accessible for all.

The reduction of the GST rate from 28% to 18% in the case of cement would provide a much-needed impetus to the realty and construction sector.