Prime Minister Narendra Modi, in a nationally televised address on Sunday, September 21, 2025, unveiled sweeping reforms to the Goods and Services Tax (GST), branding the overhaul as a “GST Utsav”, a festival of savings for Indian households. Effective from Monday, the reforms aim to simplify tax structures, reduce consumer costs, and stimulate growth across the economy.
The revamped system replaces the existing four-slab GST regime with two core rates of 5% and 18%, along with a 40% “demerit rate” reserved for luxury and sin goods. Essential commodities such as food, medicines, and household items will now attract lower taxes or be exempted entirely, offering direct relief to families and small businesses.
Calling the reform a product of strong federal cooperation achieved at the 56th GST Council meeting, Modi said the move will empower youth, women, farmers, and entrepreneurs by boosting consumption and lowering production costs. He emphasized that GST 2.0 will energize MSMEs, strengthen retail demand, and expand the purchasing power of the middle class. Concluding his speech, the Prime Minister urged citizens to embrace the “GST Bachat Utsav” as a milestone toward a more self-reliant India.