What are the GST 2.0 Reforms?
The GST 2.0 reform bill, approved by the GST Council, represents the most significant overhaul of India’s indirect tax system since the original GST was introduced in July 2017. Scheduled to roll out on September 22, 2025, just before the festive season, these reforms are designed to simplify compliance, reduce the tax burden on common citizens, and give businesses—especially MSMEs—greater ease of operation.
At its core, GST 2.0 introduces a simplified two-slab structure (5% and 18%), replacing the earlier four-tier system of 5%, 12%, 18%, and 28%. Essentials like food, medicines, and education items move to the Nil or 5% category, while household goods and consumer durables see major rate cuts. On the other end of the spectrum, a 40% rate is introduced for luxury and sin goods such as tobacco, pan masala, aerated drinks, luxury cars, yachts, and private aircraft.
Beyond tax rationalisation, GST 2.0 is also about transparency and technology-first compliance. Features like mandatory HSN code mapping, AI-driven return checks, real-time invoice matching, and faster refunds are aimed at making GST more robust, fair, and citizen-friendly.
In short, GST 2.0 is being hailed as a “Diwali gift” for the common man and businesses alike, promising lower costs, fewer disputes, and a more growth-oriented tax ecosystem for India.
Key Objectives of GST 2.0
Simplification
Transparency
Fair Taxation
Technology-First
Who is this for?
D2C & ecommerce sellers scaling B2B or bulk operations
Ecommerce heads struggling with PO volume, dispatch delays, or fulfillment errors
Warehouse, logistics & supply chain managers looking to save time and reduce errors in daily operations
Businesses and sellers targeting quick commerce and marketplaces like Blinkit, Flipkart, Zepto, or BigBasket
What are the GST 2.0 New Tax Slabs?
Let’s compare both GST tax slabs.
| Category | Earlier Rate | Current Rate |
|---|---|---|
| Daily Essentials | 12% – 18% | 5% |
| Healthcare Sector | 2% – 18% | Nil – 5% |
| Electronic Appliances | 28% | 18% |
| Sin Goods | 28% | 40% |
| Other Services | 12% – 18% | 5% |
| Footwear | 12% | 5% – 18% |
Use our GST Rate Checker to see your exact GST rate by HSN code .. Click Here
| Category | Item | Current GST | New GST |
|---|---|---|---|
| Daily Essentials | Soap, Shampoo, Toothpaste | 18% | 5% |
| Daily Essentials | Ghee, Butter | 12% | 5% |
| Daily Essentials | Noodles, Namkeen | 12% | 5% |
| Daily Essentials | Utensils | 12% | 5% |
| Daily Essentials | Baby bottles, Napkins, Diapers | 12% | 5% |
| Daily Essentials | Sewing Machine | 12% | 5% |
| Agriculture | Tractor Tyres | 18% | 5% |
| Agriculture | Tractor | 12% | 5% |
| Agriculture | Irrigation Machine | 12% | 5% |
| Agriculture | Agricultural Machinery | 12% | 5% |
| Health | Health Insurance | 18% | 0% |
| Health | Thermometer | 18% | 5% |
| Health | Oxygen | 12% | 5% |
| Health | Diagnostic Kit | 12% | 5% |
| Auto | Small Cars | 28% | 18% |
| Auto | Motorcycles | 28% | 18% |
| Education | Maps, Charts, Globes | 12% | 0% |
| Education | Pencils, Crayons | 12% | 0% |
| Education | Exercise Books | 5% | 0% |
| Household Items | Air Conditioner | 28% | 18% |
| Household Items | TV (Above 32 inches) | 28% | 18% |
| Household Items | Washing Machine | 28% | 18% |
Use our GST Rate Checker to see your exact GST rate by HSN code .. Click Here
List of goods exempted from GST
Raw Material – khadi fabric, cotton, raw jute, etc.
Basic Tools and Instruments – shovels, spades, handmade musical instruments
40% Tax on Luxury and Sin Goods
Under GST 2.0, while most categories have shifted to a simplified two-slab structure (5% and 18%), the government has introduced a 40% tax rate exclusively for luxury and sin goods. This higher slab is meant to balance revenue collection with social responsibility by discouraging consumption of harmful products and ensuring fairness in taxation.
The 40% rate applies to:
- Tobacco products – cigarettes, chewing tobacco (zarda), beedis, and related items.
- Pan masala and gutkha – considered high-risk for public health.
- Aerated and sugary drinks – linked to lifestyle diseases such as diabetes and obesity.
- High-end luxury goods – premium cars, SUVs, yachts, private aircraft, and other non-essential luxury items.
This structure ensures that essential and mass-consumption goods are made cheaper, while products that strain public health or represent luxury consumption contribute more significantly to the exchequer.
GST HSN Code Search
What is an HSN Code?
Why Does It Matter Now?
GST 2.0 Converter: Convert Old GST to GST 2.0 in 3 clicks
What Does the Tool Do?
Simply upload your product file, and the tool will instantly provide:
✅ Old GST rate for each product
✅ New GST rate (if changed)
✅ Clear indication if the rate remains unchanged
This gives you quick, actionable guidance to update tax slabs across marketplaces, your website, and Uniware without the manual hassle.
Why Use This Tool?
⏱️ Save Time: Skip endless manual searches and cross-referencing.
🛡️ Minimize Errors: Automated comparison ensures accurate results.
🛒 Be Marketplace-Ready: Keep your listings compliant on Amazon, Flipkart, Myntra, and more.
🔄 Stay Uniware-Ready: Uniware clients can directly export their item master and upload it for seamless updates.
Important Note
This tool is intended as a guidance resource only. While it highlights old and new GST rates for your products, we recommend reviewing and verifying all rates with your tax advisor or official GST notifications before updating your systems.
How It Works
1. Prepare Your File
Create an Excel sheet with a column named ‘HSN Code’ for all your products. Optionally add Product Name, SKU Code, or other details for reference.
2. For Uniware Clients
Simply export your Item Master file from Uniware and upload it directly.
3. Get Instant Results
Download your output file showing old tax rates, new rates (if updated), and confirmation where rates remain unchanged.
What is the Impact of GST 2.0 on Various Industries?
GST 2.0 won’t affect every sector in the same way, its impact will vary across industries.
E-commerce & D2C brands
FMCG & Retail
Manufacturing
For instance, a bakery earlier paid 18% GST on ingredients like cocoa or cream but sold its cakes at 12% or 18%, creating mismatches in ITC claims. Under GST 2.0, both inputs and final bakery products now fall under the 5% slab, making credit claims smoother and improving profit margins.
MSME
While the impact of GST 2.0 differs across industries, one area that affects every business alike is compliance and return filing.
Compliance & Return Filing Explained
Monthly vs Quarterly Filing
For GSTR-1 filing, the frequency depends on business turnover. Companies with annual revenue ≤ ₹1.5 crore can file quarterly, while those with turnover > ₹1.5 crore must file monthly, as per the rules set by the government.
Here is the breakdown of the monthly and quarterly filing
| Factors | Monthly | Quarterly |
|---|---|---|
| Frequency | 12 times in a year | 4 times in a year |
| Compliance Cost | High due to applicable fees | Low |
| Cashflow Issue | Less due to monthly ITC claims | High due to quarterly ITC claims |
| Ideal for | Large businesses | Smaller business |
| Financial Updates | Frequent insights help in better planning | Less frequent insights |
Common Mistakes to Avoid While Filing Returns
Choosing the Wrong HSN Code
Mismatch ITC Claims
Late Filing
At its 56th meeting, the GST Council confirmed that GST 2.0 will roll out in September 2025. Over the years, GST has reshaped India’s tax system and supported economic growth, with the Council adapting through regular reviews and changes. Looking ahead, GST 3.0 is expected to simplify slabs, reduce exemptions, and strengthen digital integration to make compliance easier and support emerging industries.
Use our GST Rate Checker to see your exact GST rate by HSN code .. Click Here