Daijiworld Media Network - Visakhapatnam

Visakhapatnam, Sep 17: Finance Minister Nirmala Sitharaman on Wednesday announced that the new phase of GST reforms — dubbed GST 2.0 — will bring a significant tax reduction that could save Indian consumers up to Rs 2 lakh crore. Speaking at the Outreach and Interaction Programme on Next Gen GST Reforms, Sitharaman stated that these changes would leave more money in the hands of common people, improving both savings and discretionary spending.

The Finance Minister emphasised that the GST Council’s decision is intended to ease the tax burden, increase liquidity in the economy, and simplify the taxation framework. According to her, 99 per cent of goods now fall under the 5 per cent GST slab, which is expected to be especially beneficial for the middle class and economically weaker sections.

Under the revised structure, the previous four-rate system (5%, 12%, 18%, 28%) has been streamlined into a simplified two-slab system of 5 per cent and 18 per cent. This rationalisation, Sitharaman said, not only lowers the overall tax burden but also enhances transparency and ease of compliance across sectors.
She highlighted that farmers would benefit significantly from lower taxes on agricultural-related products, which in turn would promote farm modernisation and help raise rural incomes. Micro, Small and Medium Enterprises (MSMEs), as well as sectors that generate large-scale employment, are also expected to gain from reduced input costs.

The Finance Minister underlined that the new tax regime would increase purchasing power and household savings across the country. Additionally, she shared data showing a sharp rise in GST revenues — from Rs 7.19 lakh crore in 2018 to Rs 22.08 lakh crore in 2025 — along with a rise in the number of registered tax-paying entities, which has more than doubled from 65 lakh to 1.51 crore.

Sitharaman said these transformative reforms align with Prime Minister Narendra Modi’s broader goals of building a Viksit Bharat and achieving Atmanirbhar Bharat. The GST 2.0 reforms, which will take effect from September 22, are expected to significantly support economic growth and empower citizens across India.