GST 2.0: Weaving India’s textile dreams into reality

On 1 July 2017, India witnessed one of its boldest economic reforms in decades. On that monsoon morning, the Goods and Services Tax (GST) replaced 17 different taxes and 13 cesses with a single unified framework, fundamentally reshaping the nation’s fiscal architecture. It was not merely a tax reform but the beginning of India’s audacious journey towards One Nation, One Tax, One Market.

- GIRIRAJ SINGH

Eight years on, the transformation has been remarkable. Tax collections have risen from Rs 7.19 lakh crore in 2017-18 to a record Rs 22.08 lakh crore in 2024-25, while the taxpayer base has more than doubled from 65 lakh to 1.5 crore. Building on this foundation, India entered the Next-Gen GST era on 22 September 2025, streamlining the system into two slabs of 5 per cent and 18 per cent, with a 40 per cent rate for luxury and demerit goods.

Households will now save more as daily essentials, medicines and education supplies are taxed at 0-5 per cent. Farmers benefit from reduced GST on tractors, tyres, pesticides and irrigation equipment, which lowers input costs and boosts rural incomes. The auto sector also enjoys relief with GST on scooters and cars dropping from 28 per cent to 18 per cent. Readymade garments priced up to Rs 2,500 (earlier Rs 1,000) now attract only 5 per cent GST.

Acollege student remarked, “Festive shopping feels lighter onthe pocket. With the same budget, I bought two trendy shirts instead of one. I don’t know much about GST slabs, but I know clothes are more affordable now.”

By contrast, luxury and demerit goods such as pan masala, tobacco, online gaming, luxury SUVs and casinos fall under the 40 per cent slab—promoting responsible consumption while reinforcing India’s commitment to a healthier future.

GST 2.0 Powers the Rs 350-Billion Textile Dream: