From Complexity To Clarity: Assessing The Legal And Economic Dimensions Of GST 2.0 Reforms
- IJLLR Journal
- Sep 10
- 2 min read
Manish Nellaikumar Pandaram, Lovely Professional University
ABSTRACT
The 2025 “GST 2.0” reforms represent the most comprehensive recalibration of India’s indirect tax regime since the original rollout of the Goods and Services Tax in 2017. By shifting from a fragmented four-slab system to a simplified two-rate structure of 5% and 18%, with a 40% levy on luxury and sin goods, the reforms aim to address long-standing inefficiencies in rate rationalisation, compliance, and dispute resolution. This paper undertakes a legal and economic analysis of GST 2.0, situating the reforms within India’s constitutional and federal framework while assessing their implications for key sectors such as manufacturing, agriculture, healthcare, insurance, and exports.
From a legal standpoint, the study evaluates the structural changes in the GST Council’s decision-making, the operationalisation of the Goods and Services Tax Appellate Tribunal, and the correction of inverted duty structures through statutory amendments. From an economic perspective, the analysis highlights the inflation-moderating potential of rate cuts, their projected impact on domestic consumption, and their role in strengthening India’s global competitiveness. Drawing on primary sources, including Finance Ministry releases and GST Council resolutions, as well as secondary economic assessments, the paper argues that GST 2.0 transforms the tax from a mere revenue instrument into a strategic tool for inclusive growth.
Ultimately, the research contends that the success of GST 2.0 will depend not only on its statutory design but also on effective enforcement, fiscal cooperation between the Union and States, and the extent to which tax reductions are passed on to consumers. By aligning legal clarity with economic efficiency, the reforms mark a decisive step towards creating a simpler, fairer, and growth-oriented tax regime in India.
Keywords: Goods and Services Tax (GST), GST 2.0 Reforms, Indirect Taxation, Rate Rationalisation, Inverted Duty Structure, GST Council, Fiscal Federalism, Tax Compliance, Inflation Moderation, Economic Growth, Administrative Reforms, Consumer Welfare, Dispute Resolution, Indian Tax Law, Inclusive Development.
