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New Delhi, September 21, 2025 – Prime Minister Narendra Modi, in a televised address on the eve of Navaratri, announced a major revamp of India’s indirect tax system with the introduction of GST 2.0, dubbing it a “Bachat Utsav” — a nationwide festival of savings — to alleviate household expenses and stimulate economic growth. The reforms, approved by the GST Council earlier this month, will take effect from September 22, aligning with the start of Navaratri.

Modi emphasized that the changes will lower the cost of living for the poor and middle class while making India more attractive to investors and entrepreneurs by streamlining the tax framework. “From tomorrow, the nation will celebrate GST Bachat Utsav. Your savings will increase, and you will be able to buy your favourite things. This reform will benefit every section of society,” the Prime Minister stated.

Key Features of GST 2.0
The new two-tier GST rate system includes:

99% of goods previously taxed at 12% now at 5%.
90% of items in the 28% slab shifted to 18%.
A 40% compensation cess retained on luxury and sin goods like tobacco, high-end vehicles, and aerated drinks.

Modi reflected on the pre-2014 tax regime as a “web of taxes and tolls” that burdened businesses and consumers, with cascading costs ultimately affecting the common

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