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Key Points

A new report from FICCI highlights significant tax relief for families under the GST 2.0 regime. The savings of up to 30% come from a major expansion of items in the lowest tax bracket. This reform is also creating a fairer system and supporting small businesses. Ultimately, GST 2.0 is reshaping the economic landscape for consumers and companies alike.

Key Points: FICCI Reports GST 2.0 to Save Households Up to 30% on Taxes

  • Households could save up to 30% on taxes for both essential and discretionary items
  • The lowest 5% tax slab now covers 149 items, up from just 54 previously
  • The new regime promotes fairness with higher earners paying a larger tax share
  • GST 2.0 also supports MSMEs and deters smuggling by reducing price differences
2 min read

Up to 30% tax savings from GST 2.0 for households across India: FICCI

A new FICCI-TARI report reveals GST 2.0 offers up to 30% tax savings for Indian households, easing budgets and supporting small businesses nationwide.

"GST 2.0 has introduced a more progressive tax structure, where people with higher incomes contribute a larger share of taxes. - FICCI-TARI Report"

New Delhi, September 26

Indian households are set to benefit from tax savings of up to 27 to 30 per cent under the new GST 2.0 regime, according to a report released by the Federation of Indian Chambers of Commerce and Industry's Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (FICCI CASCADE) along with the Thought Arbitrage Research Institute (TARI).

The joint report, titled "Decoding the Journey of GST Reforms: GST and Its Effect on Economy, Business and Household Consumption", finds that the new framework has eased the tax burden on both essential and discretionary items, providing relief to families across rural and urban India.

The report highlights that GST 2.0 has introduced a more progressive tax structure, where people with higher incomes contribute a larger share of taxes. This, it notes, ensures a fairer system for households at different income levels.

One of the most significant changes under GST 2.0 is the expansion of items taxed at the lowest slab of 5 per cent. While GST 1.0 had 54 categories in this bracket, the number has now increased nearly threefold to 149. This, the report underlines, is helping households manage their monthly budgets more effectively.

Apart from household savings, GST 2.0 is also seen to be supporting small businesses and pushing further formalisation of the Indian economy. By lowering tax rates and reducing price differences, the report states, the system not only encourages compliance but also acts as a deterrent to smuggling and counterfeit trade.

According to the findings, the lower tax rates are expected to ease pressure on consumption, strengthen MSMEs, and bring the country closer to the goal of a single, unified tax market.

The study, based on detailed analysis, suggests that the reform's impact goes beyond savings for consumers. By promoting fairness in taxation and creating a level playing field, GST 2.0 is reshaping the way households and businesses interact with the economy.

- ANI

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Reader Comments

R
Rohit P
While the intention is good, I'm skeptical about the 30% figure. Most common items were already in lower slabs. The real benefit will come if compliance becomes easier for small businesses. GST portal still needs improvement for MSMEs.
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Aditya G
Excellent move! The progressive tax structure ensures wealthier households contribute more. This is what "Sabka Saath, Sabka Vikas" actually means. Hope the savings boost consumption and help our economy grow faster. 🇮🇳
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Sarah B
As someone who runs a small handicraft business, I appreciate the focus on formalization. Lower compliance burden means we can focus more on quality and less on paperwork. Hope this helps genuine businesses thrive!
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Karthik V
The expansion from 54 to 149 items in 5% slab is significant. Common household items like packaged foods, stationery for children - these small savings add up for families. Good step towards ease of living. 👍
M
Michael C
Interesting analysis. The anti-smuggling angle is crucial - level playing field benefits everyone. However, implementation is key. Hope state governments coordinate effectively to make this work nationwide.

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