GST 2.0 Reforms Expected to Boost Consumption
Sanjay Kumar Agarwal, chairperson of the Central Board of Indirect Taxes and Customs, said that the new GST rate cuts under “GST 2.0” are expected to drive consumer spending. He noted that while the reforms could lead to an estimated ₹48,000 crore revenue loss, this may be balanced out if industries pass on savings to consumers.
Long-Planned Reforms Confirmed
Finance Minister Nirmala Sitharaman clarified that the GST changes had been under preparation for 18 months and were not a reaction to recent U.S. tariff moves. The new structure will have two main slabs—5% and 18%—along with a 40% rate on luxury and sin goods, coming into effect from September 22.
States and Efficiency Issues Raised
State finance ministers welcomed the simplification but raised concerns over possible revenue shortfalls. Sitharaman responded that improved GST collection benefits both the Centre and the states. She emphasized that the government must prioritize efficiency and compliance, as the Centre does not have unlimited resources to cover state losses.
