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GST 2.0 on Agenda as Nirmala Sitharaman Chairs Key Council Meeting in Delhi
Big decisions can be taken on GST 2.0 in the important meeting of GST Council on 3-4 September. In this, there will be discussion on dividing the tax slab into two parts, making compliance easier and reducing the burden of small businesses. In the new model, 5% can be imposed on essential goods, 18% on most goods and 40% 'sin tax' on products like gutkha-tobacco. This is expected to reduce prices.
The GST Council, led by Union Finance Minister Nirmala Sitharaman, will hold a two-day meeting in New Delhi on September 3-4, 2025. It will focus on GST reforms, including lowering tax rates, simplifying compliance, and making structural changes. Officials say the new model could have two slabs - 0-5% on essential goods and 12-18% on most products — while a 40% sin tax will stay on demerit items like gutkha and tobacco. This could make products like home appliances such as air conditioners, TVs, and washing machines cheaper.
According to a report by Business Today, on the 120th Foundation Day of City Union Bank, Sitharaman stated that the goal of GST reforms is to make the economy fully open and transparent and to reduce compliance burdens for small businesses. She also mentioned that PM Modi has formed a task force for next-generation reforms, which will focus on creating a friendly environment for startups, MSMEs, and entrepreneurs.
Sitharaman said, 'The plan for next-gen GST reforms, which will be discussed in the council meeting starting tomorrow, will further ease the burden on small businesses and provide a supportive environment for growth.' She emphasized the role of banks in increasing credit, infrastructure support, and timely funding to MSMEs and the poor as part of the vision for Developed India 2047.
