Paper Details

Name: S R Ganesh
Country: India

Year: 2025
Volume: Volume No: 12, Issue No: 2, Year: 2025 (Special Issue)
Page Number: 45-53
DOI: https://doi.org/10.5281/zenodo.17897554

ABSTRACT
The Goods and Services Tax (GST) has been one of India’s most transformative tax reforms,
aimed at streamlining indirect taxation and fostering transparency in trade. The introduction
of GST 2.0 in September 2025 marks a landmark development in the country’s indirect tax
framework. This reform simplifies the previous multi-tier structure into a two-slab system of
5% and 18%, with an additional 40% slab applicable to luxury and sin goods. The revised
structure seeks to enhance consumption, simplify compliance, and improve economic
efficiency across various sectors. This study examines the sector-wise impacts of GST 2.0
using secondary data, focusing on key industries such as pharmaceuticals, real estate, textiles,
agriculture, automobiles, consumer durables, and hospitality. The analysis reveals that the
reform has lowered consumer costs, increased the affordability of essential goods and
services, and stimulated sectoral demand and growth. Furthermore, compliance
enhancements—such as pre-filled returns and expedited refund mechanisms—have
significantly reduced the operational burden on MSMEs and retailers. Although certain
sectors continue to face transitional challenges, the overall evidence suggests that GST 2.0
serves as a catalyst for economic transformation, fostering formalization, enhancing supply
chain transparency, and advancing India’s goals for sustainable and inclusive growth. The
study concludes that while GST 2.0 has positively impacted both stakeholders, continuous
policy refinement and targeted awareness programs are necessary to ensure inclusive and
sustainable tax compliance.
Keywords: GST 2.0 reforms, Two-rate GST structure, Tax rationalization, Rate
simplification, Transparency and compliance