GST 2.0 REFORMS AND THE INDIAN MARKET: A STUDY

GST (Goods and Services Tax) 2.0 is India’s next-generation overhaul of its indirect tax regime, unveiled in 2025 via decisions of the 56th GST Council. The reforms aim to simplify tax slabs, reduce the rates on essential goods, rationalize input and output tax relationships, provide relief to consumers, and facilitate compliance for businesses—especially Micro, Small, and Medium Enterprises (MSMEs). This paper examines the nature of the GST 2.0 reforms, their likely economic effects on consumption, inflation, business margins, sectoral competitiveness, and government revenues. It also studies challenges of implementation, potential winners and losers in the market, and policy recommendations for maximizing gains. Drawing on recent data, government notifications, expert commentary, and industry reports, this study concludes that while GST 2.0 holds strong promise for boosting consumer demand, easing costs, and formalising the economy, its success will depend on effective compliance infrastructure, clear communication, managing revenue trade-offs, and ensuring that the benefits are passed through to consumers rather than being absorbed in margins.