The Next-Generation Goods and Services Tax (GST) reforms mark a transformative shift in India’s fiscal architecture, ushering in an era of simplified taxation, inclusive growth, and consumer-centric policy design. Approved in the 56th GST Council meeting, these reforms replaced the multi-tier system with a two-rate structure of 5% and 18%, reducing taxes on essential commodities, housing materials, agricultural machinery, and consumer durables while maintaining a 40% levy on luxury and sin goods. This restructuring aims to lower living costs, boost aggregate demand, and invigorate investment in key sectors including MSMEs, healthcare, education, and infrastructure. Drawing on secondary data and empirical policy evaluation, this paper critically examines the economic and fiscal impacts of the 2025 GST reforms on revenue buoyancy, public investment, and macroeconomic stability. Findings indicate that the reforms have significantly improved consumption patterns, strengthened fiscal federalism, enhanced MSME competitiveness, and reinforced debt sustainability across states. The simplification of GST has evolved beyond a taxation tool as it now stands as a cornerstone of India’s inclusive and sustainable economic growth strategy.
RAM SUNDER DAS (Sun,) studied this question.