GST 2.0 KICKS IN: GOVT SEES GROWTH, OPPOSITION DEMANDS APOLOGY

India rolled out GST 2.0 on Monday, slashing tax slabs to 5% and 18% in what the government calls a nationwide “Savings Festival.”

- RAJ KIRAN BATHULA/ AGENCIES

India on Monday rolled out GST 2.0, overhauling the indirect tax regime into two principal slabs of 5 per cent and 18 per cent, with a separate 40 per cent rate retained for luxury and sin goods.

Prime Minister Narendra Modi, in a letter to citizens coinciding with Navratri, called the reform a “GST Bachat Utsav” (Savings Festival), asserting it will lower household outgo, simplify compliance and spur investment across states and sectors.

In the letter, the Prime Minister said essentials such as food, medicines, soap, toothpaste and insurance are now either exempt or taxed at 5 per cent, while most goods previously taxed at 12 per cent have shifted to the 5 per cent slab. He said the combination of recent income-tax cuts-claiming zero tax up to an annual income of Rs 12 lakh-and GST 2.0 would translate into savings of nearly Rs 2.5 lakh crore for people. The reforms, he argued, strengthen local manufacturing and advance the vision of Aatmanirbhar Bharat en route to "Viksit Bharat by 2047".