GST 2.0: a simpler tax — and a ₹48,000 crore question
The reform addressed years of valid criticism about complexity. The trade-off is a sizeable hit to revenue.
GST’s biggest, fairest criticism since 2017 was complexity — most memorably the popcorn example, where loose salted popcorn (5%), packaged (12%) and caramelised (18%) attracted three different rates.
Effective 22 September 2025, the government reset the structure: from six slabs down to a simpler system built around two main rates of 5% and 18%, with 0% for essentials and a 40% rate for luxury and "sin" goods. Removing the 12% and 28% slabs is a real simplification.
The fiscal trade-off
Simplicity has a price. The government estimated a revenue loss of about ₹93,000 crore from the rate cuts, partly offset by roughly ₹45,000 crore from the new 40% slab — a net hit of around ₹48,000 crore. Analysts cautioned this could strain spending on infrastructure if collections don’t pick up.
Credit where due: a long-stalled reform finally happened, after years of Centre–State disagreement. The open question is whether the simpler structure broadens compliance enough to recover the lost revenue.
Sources · Free to verify
- Goods and Services Tax (India) · Wikipedia
- A2Z Taxcorp: GST in 2025, the biggest reset since 2017
- ICRA: GST rationalisation note
This is a sourced explainer built on public data — not original reporting. Every figure traces to a source above.