What is GST 2.0?
GST 2.0 is the new version of India’s Goods and Services Tax system, launched in September 2025 to make taxes easier and cheaper for people and businesses.
Additionally, it replaces the old four tax rates (5%, 12%, 18%, 28%) with just two: 5% and 18%.
However, there is also a high tax (40%) on sin and luxury goods. For a long time, businesses have also been waiting to remove the compensation cess, and now it is.
22nd September is worth it for families, with every necessary item, appliance, and vehicle costing less. For businesses, tax paying will be easier, resulting in having more cash on hand. Investors can also take advantage of this; the upcoming IPO of good industries will provide an opportunity to grow faster and make a profit.
What central government and experts expect from GST 2.0?
- The central government aims to raise around ₹48,000 crores through the tax reform.
- Experts think these tax changes could slightly reduce inflation (by 0.20% to 0.30%), especially because food, everyday goods, and housing materials will become cheaper. This drop in prices could give the RBI more room to adjust interest rates if needed.
What states are worrying about?
Owing to GST 2.0, some states have concerns regarding a potential loss of between ₹80,000 crores and ₹1.5 lakh crores.
How will business be boosted?
Besides cutting tax rates, the Council will also give faster refunds, make registration automatic, and fix tax problems, all to help companies work more smoothly.
Positive announcement from a substantial voice:
As per the sources, there are major positive voices regarding GST 2.0 are given below.
Axis Securities: People’s spending and economic growth could be due to GST 2.0.
SBI Card CEO, Salila Pande: Enough money for spending, future planning, and saving.
Confederation of Indian Industry (CII): Using just two tax rate systems instead of many is fruitful for investment and reduces problems.
Commerce Minister Piyush Goyal said GST 2.0 supports the bigger goal of ‘Viksit Bharat 2047’ and helps build a stronger nation.
All these essential voices are not just for small tax changes, but a sign of economic growth.
As per the sources, Kotak AMC MD Nilesh Shah said that GST 2.0 is like “one arrow hitting many targets.” It helps increase spending and economic growth, and also helps reduce some of the problems caused by U.S. tariffs.
Studies by SBI Research and Elara Capital say that GST 2.0 could boost GDP by 100–120 basis points (1%–1.2%) in 1 to 1.5 years. This may help balance out the slowdown caused by U.S. tariffs.
In the sharp contrast;
Marcellus CEO Saurabh Mukherjea warned that GST benefits will help, but industries like textiles, gems & jewellery, and sports goods are still at risk due to falling export demand.
Exporters like Nikkhil Masurkar (Entod Pharma) and Madan Sabnavis (Bank of Baroda) said GST relief can’t fully make up for losing export competitiveness, but it can help by boosting local demand for extra goods.
Which IPO sectors are impacted by GST 2.0?
Since last year, approximately 70 companies have received the green light from SEBI for IPO, and this GST 2.0 could be considered appropriate for them.
| Sector | Company name | GST 2.0 Impact | Sentiment |
| Auto components | Metalman Auto | 18% | Positive |
| Greaves Electric Mobility | Evs | 5% GST | Positive |
| Studds Accessories | Helmets/gear | Help for affordable vehicles is increasing. | Positive |
| Paras Healthcare, Veeda Clinical Research | Healthcare & hospitals | Cheaper medicine/ reduced GST | Positive |
| LG Electronics India, Kent RO Systems, Imagine Marketing (boAt) | Electronics | Cut to 18% GST | Positive |
| Casagrand Premier Builder, Varindera Constructions, Runwal Enterprises, Pranav Constructions | Real estate & infra | Cement GST cut (28%→18%) reduces costs/creates housing demands | Positive |
| Hero FinCorp, Aye Finance, Avanse Financial, Veritas Finance | Financial services | Higher savings/ buy insurance | Positive |
| PMEA Solar Tech, Solarworld Energy, Continuum Green Energy, Juniper Green Energy, Saatvik Green Energy, GK Energy | Renewables | GST 5% | Positive |
| GSP Crop Science, SeedWorks International, Advance Agrolife | Agri & inputs | GST reduced/ strong demand | positive |
| WeWork India, Physicswallah, Jaro Institute, Urban Company | Services/EdTech | GST same: 18%/ | Neutral to weak |
| Tobacco-related peers (if any) | Sin goods | Moved into the 40% bracket | Negative |
GST 2.0 on Automobiles
Tax has been reduced from 28-30% to 18% on small cars and two-wheelers, and the luxury vehicles tax is 40% instead of 43% to 50%, still high. Especially, electronics vehicles have 5% tax; this tax reform allows people to spend more and buy their desire things.
GST 2.0 on Consumer durables
An essential product like TVs, air-conditioners, refrigerators, and washing machines, tax cut to 18%, allows individuals to save.
FMCG & Packaged Foods
Personal products like Shampoos, soaps, hair oil, and toothpaste now have a lower tax of 5% instead of 12–18%. Moreover, biscuits, noodles, chocolates, and coffee have 5% tax.
Healthcare & Insurance
Medicines and medical devices now have a tax of 5% or zero, making treatment cheaper. Industry leaders say this is a big step toward making healthcare affordable.
Real Estate & Cement
Tax rate is cut from 28% to 18%, lowering housing project costs and helping builders earn 3–5% more. Sunteck Realty says this will boost affordable housing demand.
Renewables
Solar panels, batteries, hydrogen fuel cells, and biogas units now have a 5% GST. Hindustan Power called this a big boost for green energy.
Coal’s tax went up from 5% to 18%, but because of changes in other taxes, the overall effect is small.
Fertiliser chemicals like sulphuric acid and ammonia now have a 5% tax instead of 18%.
Agricultural machines are also taxed at 5%, helping farmers use more machines and reduce costs.
Risk & Challenges
- There might be temporary problems due to the old tax credit, and businesses need to have time to follow the new rules.
- FMCG and appliance companies might keep some of the tax savings instead of passing them all to customers, so prices may not drop much.
- Foreign investment in India also depends on things like U.S. interest rates, the strength of the dollar, and oil prices, not just India’s tax changes.
- Businesses like gaming and sin goods (like alcohol or tobacco) have high taxes, which can hurt their market value.
- Education, detergents, and online services still have the same 18% tax, so they have fewer benefits.
