India’s GST system is evolving with the launch of Next-Gen GST reforms, moving from multiple tax slabs to just two: 5% for essentials and 18% for most goods and services. The outdated 28% slab has been eliminated, making everyday items like cars, ACs, and appliances more affordable.
These changes are designed to reduce compliance burdens, especially for MSMEs, with faster refunds and one-click registration. Inverted duty structures have been resolved, ensuring smoother input tax credit claims.
Since its introduction in 2017, GST has broadened the tax base from 65 lakh to over 1.51 crore taxpayers, promoting formalization and fairness. Monthly revenues now consistently average ₹1.6–1.7 lakh crore, reflecting system stability.
Consumers can expect lower prices on essentials like groceries and medicines, while businesses benefit from a more predictable and globally competitive tax environment. GST 2.0 isn’t just hype—it’s a smarter, simpler tax system built for growth.
- Q: Isn’t GST just another tax burden on us?
A: No! GST replaced 17 different central and state taxes and 13 cesses with One Tax, which has reduced tax burden.
- Q: Why another ‘reform’ now? Didn’t the GST fix everything already?
A: 2017 was step one. Now GST 2.0 cuts slabs to just 2 rates – 5%, 18%, making it all the more simpler and compliance friendly.
- Q: So why are we talking about Next Gen GST Reforms now?
A: Pehle aap chronology samjiye! 8 years ago, the GST was introduced. Today, GST system has stabilised with revenues of ₹1.6 – 1.7 lakh crore every single month in 2024, the stage is set for the next wave of reforms.
- Q: Does this mean GST 1.0 failed?
A: Absolutely not. GST 1.0 united India’s tax system. GST 2.0 builds on that foundation to make it cleaner, easier and transparent.
- Q: What’s the big change in Next Gen GST Reforms?
A: From 4 slabs to just 2: 5% for essentials, 18% for most goods & services.
- Q: GST 2.0 has 2 slabs – 5% & 18%. Okay… but where did the others go?
A: Merged smartly! The 12% bracket mostly move to 5% (essentials) that means cheaper prices on foods, medicines, and home items and some going to 18% (standard goods).
- Q: And the big 28% slab? Still there?
A: Not anymore. Most of those items now drop to 18% – cars, ACs, TVs, fridges, washing machines… all 10%+ cheaper.
- Q: Will small businesses still be confused with multiple slabs & changes?
A: With GST 2.0’s fewer slabs, that doubt disappears. Instant clarity will make business smoother.
- Q: But what about raw materials being taxed higher than the final product?
A: Not anymore. GST 2.0 removes inverted duty issues, ensures smooth refunds, and frees up working capital.
- Q: Will compliance still be a burden for MSMEs under GST 2.0?
A: No! With instant refunds, and one-click registration, GST 2.0 makes compliance faster, lighter & smarter for MSMEs.
- Q: Won’t states lose money if tax rates are cut?
A: No. The 12% slab barely added revenue, and shifting 28% items to 18% will grow demand. States will get predictable, stable revenues while citizens get lower prices.
- Q: Isn’t GST just squeezing the same old taxpayers harder?
A: No. It has widened the base – from 65 lakh taxpayers in 2017 to over 1.51 crore now. More businesses are formal, fairer for all.
- Q: Will GST keep changing again and again?
A: With 2 clear slabs GST enters a settled phase – predictable, stable, and fair.
- Q: Fine for businesses… but what about me? Will my everyday expenses actually get cheaper?
A: Yes! Groceries, medicines, Movies – all fall neatly into simpler slabs. Essentials stay at 0–5%, most services at 18%.
- Q: Can GST make India’s economy more competitive globally?
A: Yes. A simpler, unified tax system cuts trade costs and boosts exports. India becomes a stronger player in the global market.
The FAQ’s can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/09/GST-FAQs-04.09.2025.pdf
