NEW DELHI, September 19, 2025 : The government’s announcement of GST 2.0 is expected to bring far-reaching benefits for households, businesses, and the broader economy, according to a new report by FICCI’s Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE).
The report highlights that GST 2.0 will:
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Ease tax burdens on households, particularly rural families.
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Empower MSMEs by correcting distortions in the duty structure.
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Accelerate formalisation of India’s economy.
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Strengthen the “One Nation, One Tax” vision.
Key Highlights of GST 2.0:
🔹 The share of items taxed at 5% nearly triples, rising from 54 to 149 categories.
🔹 For rural households, exempt/merit goods in the consumption basket rise from 56.3% to 73.5%; for urban households, from 50.5% to 66.2%.
🔹 Effective GST incidence falls:
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Rural families: 6.03% → 4.27%
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Urban households: 6.38% → 4.38%
🔹 This will leave more disposable income, boosting spending on services, retail, and local businesses.
Impact on Businesses:
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Rationalised rates to address inverted duty structure.
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Expected short-term revenue loss, but compensated by wider compliance, consumption growth, and coverage.
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GST taxpayers increased from 66.5 lakh (2017) to 1.51 crore (2025).
Revenue & Formalisation:
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Indirect tax collections doubled from ₹11.78 lakh crore (2018-19) to ₹22.09 lakh crore (2024-25).
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Illicit markets flourished under GST 1.0 due to high tax rates — FMCG up 70%, packaged foods nearly 100%, and illicit tobacco trade crossing ₹41,000 crore. GST 2.0 aims to curb these gaps by moderating standard slabs and bringing essentials into lower tax brackets.
Ficci CASCADE Chairman Anil Rajput said:
“GST 2.0 builds on the foundation of 2017 reforms with simplified structures and efficiency. It truly embodies the vision of One Nation, One Tax while strengthening consumer safety and protecting legitimate businesses.”
The report concludes that every rupee spent on legitimate goods supports formal businesses, strengthens the economy, and safeguards consumers, while illicit trade undermines both growth and revenue.
