Just as big companies offer annual discounts, the government has introduced its “cell offer” in the form of GST 2.0 before the festivals – efforts are being made to ensure that customers can feel the advantage of Diwali shopping before shopping. This reform was announced on 3 September and is now being implemented. Finance Minister Nirmala Sitharaman is issuing notification of new rates, accelerating the registration and refund process, as well as companies have been instructed to clearly display new prices on products before festivals.
Although the decision came fast, the GST Council was already considering these amendments between August 15 and September 3. The sign given in Prime Minister Narendra Modi’s Independence Day speech intensified the decision and the council decided to implement it before the festivals.
GST 2.0: Full picture of change
The GST Council, which is headed by Finance Minister Sitharaman, has approved a comprehensive change in tax structure. Now essential items like paratha, cheese, UHT milk, biscuits, sauces and dry fruits will either be in 5% tax slab or will be completely tax-free. Personal care products like hair oil and toothpaste will also be levied only 5% tax.
Expensive home appliances such as AC, fridge, big TV and washing machines have now come under 18% GST instead of 28%. At the same time, small vehicles, auto parts and cement up to 350cc have also been brought into 18% tax slab.
A major demand of the middle class – the removal of GST on health and life insurance – has also been met. Earlier they were taxed at 18%, but now they have been completely exempted.
Overall, tax rates have been cut on about 400 useful goods.
Finance Minister’s statement
Sitharaman said, “The government will have a fiscal impact of ₹ 48,000 crore, but this will have ₹ 2 lakh crore in the hands of the people.” Grant Thornton reports that GST 2.0 can save ₹ 400-600 on a middle class family’s monthly grocery purchase of ₹ 10,000. Also, health insurance can get a relief of ₹ 7,000-8,000 annually.
Applicable from 22 September, states are also preparing
On 17 September, the Center issued a notification of the revised GST structure, which will come under impact from 22 September. State governments are also trying to make their SGST notifications according to the center. Businesses have got about two weeks to update their billing systems and paste new prices of products.
Display and labeling arrangement
Manufacturers will have to revise or supplementary price lists to dealers, retailers and regulators to ensure transparency under GST 2.0. It is not necessary to re-lobbing on medicines and medical devices in the market before 22 September 2025; Retailers can sell existing stocks according to the revised price list.
Industry preparation and contact campaign
CBIC has started dialogue with manufacturers, retailers and e-commerce companies to solve technical problems related to ERP system, invoicing and supply chains.
Registration and refund boom
The GST Council has made the process easier along with changes in rates. Now “Non-Riski” trades can get registration in three days. Refunds in areas such as textile, chemical, fertilizer and pharma will take place in seven days. Exporters with a claim less than ₹ 1,000 will get immediate refunds. Auto-refund and pre-found returns are also planned from October.
Some obstacles may also come out
Although the story of relief is encouraging, there are some challenges. Small and medium businesses have to make rapid changes in their billing and ERP system. Updating prices can be a difficult task for retailers who have old stock. Some remote shopkeepers may be confused about new rates. Lack of coordination in the GST system of the Center and the state can also cause confusion for some time.
In addition, customers will also not feel relieved until the discount is clearly visible – not only by the government announcement.
Positive response of industry
Despite this, the industry has positively welcomed this decision. The area associated with the consumer segment is increasing staffing and giving an edge to marketing. According to the ET Bureau report, temporary recruitments in retail, electronics and FMCG regions have increased by 20–25% compared to last year.
Major e-commerce platforms like Amazon and Flipkart are also preparing for their sale. Amazon’s “Great Indian Festival” starts on 23 September, the day after the new rates of GST came into force. Retailers are re -fixing prices with brands, depositing stocks, and making discounts plans so that the direct benefit of GST deduction can reach customers.
