Paper: GS – III, Subject: Economy, Topic: Taxation, Issue: GST Reforms.
Context:
The 56th GST Council meeting (Sept 3, 2025) marks a milestone in India’s tax history.It aims at major reforms to simplify GST structure, reduce anomalies, and align Indian taxation with global practices.
Key Highlights:
Key Reforms under GST 2.0
Simplified Rate Structure: Old slabs (5%, 12%, 18%, 28%) will be replaced with:
- Standard Rate: 18%
- Merit Rate: 5%
- De-merit Rate: 40% (for select items)
- Move towards a transparent “Simple Tax” system.
GSt Reforms and Relief Measures:
Institutional & Process Reforms:
- Establishment of Goods & Services Tax Appellate Tribunal (GSTAT) by end of 2025.
- Provisional refunds for inverted duty structures.
- Harmonisation of valuation rules.
- Faster dispute resolution, consistent rulings, reduced compliance burden.
Benefits & Implications:
Conclusion:
GST 2.0 is more than a tax reform. By simplifying rates, correcting anomalies, and institutionalising dispute resolution, it strengthens India’s fiscal stability while promoting consumption, investment, and employment.
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