RAS question
The 56th GST Council meeting approved GST 2.0 with a two-slab structure. What are the two standard rates under GST 2.0, and from which date does it take effect?
Correct answer: (A) 5% and 18%, effective September 22, 2025.
GST 2.0 uses two standard rates, 5% and 18%, and takes effect from September 22, 2025.
Explanation
The 56th GST Council meeting on September 3, 2025 recommended a major rate rationalisation under GST 2.0. The earlier four-slab structure of 5%, 12%, 18% and 28% was reduced to two main rates: 5% as the merit rate and 18% as the standard rate. The PIB release also notes a 40% special rate for sin and luxury goods, so the question is asking only for the two standard rates, not every rate in the system. The reduced rates take effect from September 22, 2025, and the restructuring made more than 175 items cheaper.
Why the other options are wrong
- (B) 8% and 20% do not match the two main rates identified for GST 2.0, and October 1, 2025 is not the effective date stated by the PIB release.
- (C) This option keeps the 5% rate but replaces the 18% standard rate with 20%, and it gives November 1, 2025 instead of the notified September 22, 2025 effective date.
- (D) 12% was part of the earlier four-slab structure that GST 2.0 rationalised away as a main rate, so 12% and 18% are not the two standard rates under the new structure.
Concept
This tests GST Council decisions and indirect-tax rate rationalisation, a recurring RAS economy theme because GST changes directly affect prices, revenue policy and current-affairs-linked fiscal governance.