Next Generation GST 2.0 in India: Structural Reforms, Sectoral Impacts and Socio Economic Implications

Since its launch in 2017, India’s Goods and Services Tax( GST) has represented a corner shift in the country’s indirect tax regime. In September 2025 the government blazoned a major reset — generally appertained to as “ GST 2.0 ” — which streamlines tax slabs, abolishes the compensation cess, and emphasises simpler compliance, enhanced consumption and formalisation of the economy. This paper analyses GST 2.0 by comparing it with the earlier GST regime (hereafter “GST 1.0”), examining structural changes, sector-specific effects, and socio-economic, cultural and technological dimensions of the reform. Using secondary data and published analyses, the study finds that GST 2.0 offers consumer relief, potential stimulus to manufacturing and services, better formalisation for MSMEs, but also raises questions about revenue loss, inverted duty structures and state-level variation. Quantitative estimates suggest tax-rate reductions may yield savings of about ₹2 lakh crore for households and contribute 0.7–0.8 percentage points of GDP growth in the near term. The paper concludes with policy recommendations to ensure that the reform’s benefits are inclusive, sustainable and broadly distributed across sectors and regions.