India Introduces GST 2.0 with Simplified Two-Slab Tax Structure

• India is implementing major GST reforms called GST 2.0 that simplify the tax structure from four slabs to just two rates of 5% and 18%, removing the previous 12% and 28% categories
• The reforms aim to reduce classification disputes, compliance complexities, and inefficiencies while improving cash flow for businesses through uniform rates and faster refunds, with full implementation expected by September 2025
• Primary beneficiaries include average citizens, farmers, small traders, and labor intensive industries who will experience reduced costs on essentials, machinery, and inputs leading to increased disposable income and productivity
• FMCG and daily essentials see significant rate reductions to 5% on items like personal care products, food items, and kitchenware, with some products like UHT milk receiving nil rates
• Agriculture and healthcare sectors receive substantial relief with 5% rates on farming equipment and fertilizers, plus nil tax rates on life insurance policies and lifesaving medicines

Source: global.ecovis.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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