The Government of India will implement the revised GST structure on Monday, marking the most significant overhaul of the Goods and Services Tax (GST) regime.

The sweeping reforms, approved earlier this month by the GST Council, will introduce a simplified two-tier tax system and revise rates for over 375 items, directly affecting household budgets across the country.

Key Highlights

• GST 2.0 simplifies tax slabs to 5% and 18%, reducing rates on essentials, medicines, and electronics. 
• Consumers expected to save ~₹2 lakh crore annually—with cheaper small cars, appliances, and food items.

Under the new structure, most goods and services will be taxed at either 5% or 18%, replacing the previous four-slab system. A higher rate of 40% will apply only to ultra-luxury items, sin goods, and other depreciating products.

Essential items such as food grains, medicines, and daily-use consumer goods will remain in the 5% bracket, ensuring affordability for the average person. Meanwhile, because the 12% tax slab has been removed, mid-range products may become less expensive.

Ghee, butter, paneer, coffee, snacks, jams, ketchup, dry fruits, and ice cream are among the items that will have their GST rates reduced. The government claims that this move is intended to provide financial relief to urban and semi-urban households, particularly ahead of the holiday season.

To mark the start of the new GST regime, Prime Minister Narendra Modi announced on Sunday that a nationwide "GST Utsav" would begin on the first day of Navratri, calling it a "festival of savings" for all Indians.

"Next-generation GST reforms will be implemented starting tomorrow. "It's like a GST savings festival," PM Modi said in his national address. "Beginning September 22, people will be able to purchase their favorite items at reduced prices. The GST rate cuts have benefited both the poor and the new middle class.

Also Read: Revised GST Rates Effective September 22: Key Details

On September 18, the Union Finance Ministry notified the revised Central GST (CGST) rates, while state governments issued corresponding notifications for State GST (SGST). The combined effect of these changes will be felt starting Monday.

With the new system, known as GST 2.0, the government hopes to increase consumption, simplify compliance, and make the indirect tax structure more transparent and user-friendly. Small businesses, MSMEs, farmers, women, and youth are expected to benefit greatly from the reforms.