India’s GST 2.0 reforms became effective from September 22, 2025. The core aim was to simplify GST rates so that the tax burden on common-use goods, farmers, labour-intensive industries, agriculture and healthcare could be reduced, while compliance became easier for businesses. The reform reorganised the structure mainly into two slabs, 5% and 18%. Official material also records that the earlier 12% and 28% rates were removed, while a 40% rate applies to luxury and sin goods. This makes the reform a rate-rationalisation exercise, not just a narrow tax-cut package.
GST 2.0 is useful for linking indirect taxation, the GST Council’s recommendatory role and rate simplification. On the economy side, it is relevant to indirect taxation, consumption demand, ease of doing business, tax compliance and revenue balance. On the polity side, the GST Council is important because, under Article 279A, it makes recommendations to the Union and the States on GST-related matters, exemptions and rates. The 56th GST Council meeting on September 3, 2025 recommended the rate changes, and the revised rates were to take effect from September 22, 2025.
In RAS/UPSC prelims, likely factual areas include the two-slab framework, effective date, GST Council and Article 279A. In mains, the reform can be used in answers on cooperative federalism, tax reform, consumer demand, small businesses and compliance simplification. For static GK linkage, GST should be understood as an indirect tax on the supply of goods and services, while the GST Council should be seen as a Centre-State coordination body for GST design and rate recommendations.