GST 2.0 Tax Rates 2025 | Percentage of GST Slabs Explained
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- by MI September 17, 2025
The introduction of GST 2.0 in 2025 has simplified India’s taxation system. One of the major updates is the revised GST percentage slabs applied to goods and services. In this blog, we explain the GST 2.0 percentage rates, their impact, and how they differ from the old GST system.
GST 2.0 Percentage Slabs in 2025
| GST Slab | GST 1.0 Rate | GST 2.0 Rate | Applicable On |
|---|---|---|---|
| 0% | 0% | 0% | Essential food items, basic medicines |
| 5% | 5% | 4% | Packaged food, household essentials |
| 12% | 12% | 10% | Consumer goods, electronic appliances |
| 18% | 18% | 15% | Services, telecom, electronics |
| 28% | 28% | 20% | Luxury cars, tobacco, high-end goods |
Key Highlights of GST 2.0 Percentage Changes
- Lower tax rates for essential goods and services.
- Mid-range GST slabs (12% and 18%) reduced to 10% and 15%.
- Luxury items under 28% GST now fall under a reduced 20% slab.
- Simplified structure makes compliance easier for small businesses.
Impact on Consumers and Businesses
The reduction in GST rates under GST 2.0 makes essential products cheaper, boosts consumer spending, and helps businesses by lowering tax burdens. Luxury items still attract higher taxes, but the rates are comparatively reduced.
Conclusion
GST 2.0 has streamlined India’s indirect tax system with simplified slabs and reduced percentages. This shift not only makes products affordable for consumers but also encourages compliance and growth for businesses. As India moves toward a more digital and transparent tax regime, GST 2.0 plays a crucial role in shaping the economy.
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