GST 2.0 in Effect From Sept 22 | Ready Reckoner

Udaipur, Sept 22, 2025: Effective today, the GST 2.0 reforms are now in force, simplifying India’s GST structure and offering relief on essential goods and services.

Key Highlights of GST 2.0

• 12% and 28% slabs scrapped:
• 99% of items previously under 12% now taxed at 5%
• 90% of items under 28% moved to 18%
• Luxury and “sin” goods: Subject to 40% compensation cess

The GST Council approved this 2-slab system on September 3, 2025, retaining only the 5% and 18% slabs.

Essentials Made Cheaper

• Food & dairy: Roti, chapati, paratha, paneer, UHT milk → Nil tax; butter, ghee, cheese → 5%
• Personal care: Hair oil, toothpaste, shampoo, soap, shaving creams → 5%
• Utensils & snacks: Pre-packaged bhujia, mixtures, utensils → 5%
• Life-saving drugs: Fully exempt from GST

Education & Healthcare

• Exercise books, notebooks, pencils, crayons → Exempt
• Thermometers, diagnostic kits, glucometers, medical oxygen, corrective spectacles → 5%
• Individual health and life insurance → Exempt

Agriculture

• Tractors & parts → 5% (from 12-18%)
• Drip irrigation systems & sprinklers → 5%

Automobile & Construction

• Cement, three-wheelers, motorcycles up to 350cc → 18% (from 28%)
• Buses, trucks, ambulances → 18%
• All auto parts → 18%

Electronics

• Air conditioners, TVs above 32 inches, monitors, projectors, dishwashers → 18%

Luxury & “Sin” Goods (40% Cess)

• Caffeinated beverages, sugared aerated drinks, fruit-based drinks
• Cigarettes, cigars, pan masala, tobacco products
• Hybrid diesel (>1500cc) & petrol cars (>1200cc), motorcycles above 350cc
• Passenger cars, racing cars, other non-alcoholic beverages

Impact: GST 2.0 simplifies taxation, reduces rates on essentials, and aligns luxury/sin goods with higher taxation for compensation.