GST 2.0: Relief For Middle Class & Farmers, GST 2.0 Will Benefit Small Businesses Too

New Delhi: Finance Minister Nirmala Sitharaman said on Wednesday that changes in the GST structure will bring relief to common people, farmers, the middle class, and small businesses (MSMEs). Under this reform, the 2 percent and 28 percent tax slabs may be removed. Only two slabs – 5 percent and 18 percent – will remain. Sitharaman added that GST 2.0 will make the tax system simpler, more transparent, and focused on growth.

As per a post on the official X account of the Finance Ministry, she mentioned that essential items will become cheaper under this new system, which will increase their use. This statement came during the GST Council's Group of Ministers (GoM) meeting held at Delhi's Vigyan Bhawan on Wednesday.

Sitharaman said that GST 2.0 is based on three pillars:

- Structural reforms

- Simplifying tax rates

- Making life easier for citizens

GST 2.0 to Help Make India Self-Reliant

In the meeting, the Finance Minister said this new system will help people become self-reliant and will boost manufacturing and the MSME sector. She called this a big step towards making India "Atmanirbhar" (self-reliant). During the meeting, she also shared the central government’s plan for next-generation GST reforms. She said that in the coming weeks, the centre will work with states to build a mutual agreement on this new system.

Next Meeting to Discuss Key Issues

According to a PTI report, the Finance Minister's speech lasted around 20 minutes. She explained why the GST structure needs to be changed and how it will benefit the country. She also asked states to support this reform. The next GoM meeting will be held on August 21, where discussions will be held on making tax slabs easier, insurance tax, and compensation cess.

GST 2.0 Will Be Based on These Three Pillars

Under the new GST structure, only 5 percent and 18 percent tax rates will be used for most goods. For a few harmful or luxury items – like pan masala, tobacco, and online gaming – taxes could go up to 40 percent.

At present, GST has four slabs – 5 percent, 12 percent, 18 percent, and 28 percent. Essential food items are taxed at 5 percent or not taxed at all, while luxury and harmful goods are taxed at 28 percent.