PM Modi on Independence Day 2025, announced the next-generation GST reforms, dubbed GST 2.0, expected by Diwali, to rationalize the existing tax rates. As per the Centre’s proposal, the existing 12% and 28% GST slabs will be scrapped entirely, while retaining the 5% and 18% tax slabs.
At present, Goods and Services Tax is a four-tier structure of 5, 12, 18 and 28%. While food items are either taxed at 0 or 5%, luxury and sin goods are taxed at 28%. On top of the 28% slab, cess at varied rates is levied on demerit and luxury goods, like cars.
