GST 2.0, explained simply

On 22 September 2025, GST got its biggest reshape since 2017. The messy four-rate structure was simplified, and most of us now deal with just two numbers most of the time.

What the slabs look like now

• 5% — everyday essentials and merit goods.
• 18% — the standard rate for most goods and services.
• 40% — a de-merit rate for luxury and sin goods.
• A few niche rates remain, such as 3% on gold and jewellery.

The big news is what's gone: the old 12% and 28% slabs were removed. Many items that sat at 12% moved down to 5%, and a lot of the 28% bracket moved to 18%, which is why so many goods quietly got cheaper.

CGST, SGST and IGST — who gets what

The rate is the same; only the split changes with the direction of supply:

• Within a state (intra-state): the GST is split into CGST + SGST in equal halves. So 18% is 9% CGST + 9% SGST.
• Between states (inter-state): a single IGST applies at the full rate.

Don't forget input tax credit

If you're registered, the GST you pay on eligible business purchases (input tax credit) can be set off against the GST you collect on sales. You only deposit the difference — so your real cost is the net, not the gross. Keeping clean purchase invoices is what makes that credit claimable.

What it means for you

For consumers: many things cost a little less. For small businesses: simpler pricing, fewer rate disputes, and the same monthly discipline — GSTR-1 around the 11th and GSTR-3B around the 20th of the following month (QRMP filers differ). The arithmetic of adding or removing GST hasn't changed; the rates have.

This article is general information, not professional advice, and reflects the law as understood for FY 2025-26. Verify against the bare Act, Rules and current notifications, and consult a qualified professional before acting.