GST 2.0: “GST Bachat Utsav” Marks a New Roadmap to Economic Growth and Savings

Recently, the Government of India has rolled out GST 2.0, an economic reform that celebrates reduced prices for dealers and customers this festive season. Officially titled as “GST Bachat Utsav”, the aim is to transform the Indian market landscape. This innovative step has been one of the most ambitious tax system overhauls since the implementation of GST( Goods and Services Tax) in 2017. The new policies are designed to boost consumer spending, encourage compliance and create awareness about the GST benefits. It was crafted with the motive of efficiency, transparency and substantial savings for both businesses and consumers. Read the article to get full details of “GST Bachat Utsav” and how it will lessen the burden on your pockets.

ALSO READ- India Rises to 38th in Global Innovation Index 2025

Overview of GST 2.0-

The Goods and Services Tax was introduced in July 2017, which promised “One Nation, One Tax”. Since then, the tax has gone through multiple adjustments and revisions. However, critics argued that heavy compliance, a complex rate structure, and frequent reforms hampered it. To resolve the global inflationary issues and boost the domestic market, the PM Narendra Modi introduced GST 2.0, and called it “GST Bachat Utsav” or “GST Savings Festival” to lessen the burden on pockets and make taxation seamless for businesses. This significant fiscal reform was launched on 22 September 2025, the day when the 9-day Navratri celebrations began all over India.

The new GST rates are 0% or 5% tax on essential commodities, 18% on vehicles and electronics and 40% on luxury items.

Importance of ‘Bachat’ for the Common Man-

For every middle-class man, the word “Bachat” holds relief. “Bachat” means “savings”, and by using this word, the government emphasises awareness of the benefits of the new reforms framed under GST 2.0. By lowering the GST rate slabs on commodities and services, the government gives more purchasing power and encourages local businesses to boost their sales.

• By restructuring the GST rates and rationalising the tax system, the government has planned to reduce the tax percentage by 5-18%. This will result in Rs. 2.5 lakhs crore savings in annual households. 
• The GST tax slabs have been eased with commodities falling under 5% and 18%.
• Food, medicines, toothpaste, soaps and essential utilities are exempted from GST or fall under 5% GST rate. It means low inflationary pressure on necessities for middle-class families. Earlier, these commodities were taxed at 12%.
• Vehicles and electronics will be reduced to 18% taxation.
• Electronic durables such as washing machines, refrigerators, TV sets, etc. and vehicles were heavily taxed; however, the Bachat Utsav now attracts a uniform and reduced rate.
• Assuring actual tax savings by lowering the GST rates, this 100-day campaign brings great benefits to end-users. The sellers must clearly display the discounts and benefits on invoices and bills.
• The government directs that it be a “GST discount” in bills and invoices to ensure transparency. 
• GST 2.0 will benefit all sections of society, including farmers, shopkeepers, traders, entrepreneurs, women, youth, poor and middle-class families.

Impact on Businesses-

GST 2.0 is a game-changer for small and medium enterprises. With the new reforms, there will be a reduction in capital investment and operational costs, such as raw materials, which will improve their productivity and market supply. It will benefit the following businesses:

• Startups – The Indian government has simplified the GST filing process for startups and tech businesses, focusing on growth rather than tax consultants.
• Manufacturers – By lowering GST slabs, manufacturers can easily procure the raw materials, strengthening Indian products on international and domestic markets.
• Retailers – The transparent discounts and pricing structure will attract consumers and increase sales. 

Businesses file a single annual return with easy quarterly instalments (optional), and they get benefits from automated invoice matching and faster refunds. This eliminates mistakes in manual calculations as the system is automated with an AI and Blockchain algorithm, avoiding harsh penalties.

Benefits to Consumers-

The announcement of GST Bachat Utsav has brought the following benefits for the consumers:

• Major Savings: In the previous GST, essential goods such as food staples, personal hygiene products, groceries, and medicines were taxed at a rate of 12-18%. But, with the implementation of new reforms, GST 2.0, the government has lowered the tax to 5% or nil. Subsequently, the prices of soaps, shampoos, milk, bread, pulses, and other essentials have dropped, increasing monthly household savings.
• Big Purchases, Big Relief: Consumers can buy large electronic appliances such as TVs, refrigerators, or washing machines, which previously faced a 28% GST, now lowered to 18%. This could save thousands on single purchases, meaning a direct 10% drop on appliances, saving Rs. 3,000-10,000.
• Transparency and GST Discounts: Directed by the government, the retailers or sellers must clearly display the “GST Bachat” or “GST Discount” on bills and invoices. This transparency will ensure that the buyer can track their benefits at every point of sale. 
• Wider Scope of Waivers: Commodities and services, including life insurance, health insurance, medicines and daily items, are now GST-exempt or taxed at minimal rates, easing the household budget.
• Festival Season Purchasing Power: The campaign of “GST Bachat Utsav”, Indian families have more disposable income for festival shopping, travel and gifts. Moreover, consumers will be encouraged to purchase Gold jewellery, which attracts a 3% GST. This leads to more predictable costs and transparent billing, benefiting wedding and festive shoppers.

Digital Transformation in GST 2.0-

The government have invested massively in upgrading the Goods and Services Tax Network (GSTN), which earlier suffered frequent clashes and technical glitches during peak filing season. 

• The upgraded GST Suvidha Portal ensures real-time invoice matching, live dashboards and bilingual interface supporting 15 Indian languages, including regional enterprises.
• The AI predictive systems are designed to alert small traders about compliance deadlines and provide notifications for timely payments.
• Mobile applications are expanded with advanced features to ease tax calculations and return filing for enterprises.
• With the new system, the registered firms will get instant GST credit. The user will get the Input Tax Credit available within 24 hours, ensuring better working capital inflow.
• Late filing or minor mismatches will not exist, avoiding heavy penalties and encouraging voluntary compliance. Also, the system is protected against fraud and threats. 
• The step towards technological innovation in GST 2.0 coincides with one of the primary goals of India to become a Digital Economy, integrating fintech, compliance and e-governance at one place.

Challenges to the New System-

Implementation of GST 2.0, under the label of “GST Bachat Utsav”, represents both a revision and an innovation in India’s indirect tax pathway. The main objective of introducing the reform is to lessen the tax burden with digital integration that will strengthen the socio-economic status and streamline governance. Meanwhile, the new system may bring challenges that need to be overcome:

• Critics doubt that the system is completely reliant on blockchain and AI technology. 
• Also, not all entrepreneurs and business owners are digitally educated, which may alienate them from the system. Many traders and small businesses may face issues in GSTN, e-filing and e-invoicing due to inadequate knowledge.
• The Centre-State GST Revenue model will be affected by the system. Though it ensures transparency, the end of GST compensation to states has created tension and increased fiscal pressure, limiting government expenditure on welfare programmes.
• Initially, the businesses and MSEs may face issues in updating accounting and billing systems, rectifying amounts and implementing new rules in ERP solutions.
• The companies need to relabel and reconcile previous stock under the prior tax slab.
• Despite technological innovation in GST 2.0, fraudsters fake invoices, e-bills, and unregistered sellers may invade the system.

FAQs-