New Delhi: A joint report by The Federation of Indian Chambers of Commerce and Industry’s Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (FICCI CASCADE) and the Thought Arbitrage Research Institute (TARI) reveals significant tax savings for Indian households under the new GST 2.0 regime.
Titled “Decoding the Journey of GST Reforms: GST and Its Effect on Economy, Business and Household Consumption”, the report highlights how the latest reforms are making daily life more affordable for both rural and urban populations.
According to the report, GST 2.0 has lowered the tax burden on essential and discretionary items, making them more accessible to households.
Based on the report’s analysis, households across India will experience relief of 27 to 30 per cent in taxes due to GST 2.0.
The report emphasises that the tax structure under GST 2.0 is now progressive, meaning that those with higher incomes pay a greater share in taxes. This ensures a fairer distribution of the tax burden across income groups.
Additionally, the lower rates under GST 2.0 are expected to ease pressure on household budgets, support small businesses (MSMEs), and further formalise the economy, moving India closer to the goal of a single, unified tax system.
One of the most important changes is the increase in the number of items taxed at just 5 per cent. Under GST 1.0, only 54 consumption categories were taxed at this rate. With GST 2.0, that number has nearly tripled to 149 categories. The report also points out that by reducing price differences, GST 2.0 helps curb smuggling and counterfeit goods. Mpost