GST 2.0 and ripple effect on luxury, investments, and wealth planning
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India’s indirect tax regime has undergone a structural shift. Announced on September 5, 2025, and scheduled to take effect from September 22, GST 2.0 rationalises the current four-tiered tax rate structure into a citizen-friendly ‘Simple Tax’ — a two-rate structure with a Standard Rate of 18% and a Merit Rate of 5%, along with a special de-merit rate of 40% for a select few goods and services. In the layers beneath, there are quieter implications for consumption patterns, capital flows, and the rethinking of certain financial instruments. Changes in GST slabs 2025 - GST 2.0 ETMarkets.com A simpler tax structure with strategic implications The core of the reform is a reduction in complexity. The earlier multi-slab format has been flattened into three distinct rates: 5% for essentials and government-incentivised categories 18% as the new standard rate 40% for luxury and sin goods What qualifies as “essential” has always been fluid, but in t...