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The government's announcement of GST 2.0 is expected to significantly ease the tax burden on households, empower MSMEs and accelerate the process of formalisation, bringing India closer to the long-standing vision of asingle tax regime, according to a report by FICCI's Committee Against Smuggling an
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FAQ :
GST 2.0 is an upcoming reform of India's Goods and Services Tax system, designed to further ease tax burdens, empower Micro, Small, and Medium Enterprises (MSMEs), and strengthen the formal economy.
GST 2.0 is expected to significantly lower the tax incidence for households. The share of exempt and merit goods in the consumption basket will rise sharply, leading to a projected fall in effective GST incidence for rural families from 6.03% to 4.27% and for urban families from 6.38% to 4.38%.
GST 2.0 proposes rationalised tax rates for MSMEs, aiming to address the issue of the inverted duty structure and improve efficiency and ease of compliance.
The report acknowledges a possible short-term revenue loss but suggests it will be offset in the medium term by increased consumption, better compliance, and a wider tax base.
Since the rollout of GST 1.0, indirect tax collections have doubled, and the number of GST taxpayers has surged from 66.5 lakh in 2017 to 1.51 crore in 2025, indicating success in expanding India's formal economy.
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