GST collections aren't rising just like that; this major government reform 11 months ago is the key

RJ Kesari News Desk: India's GST collections are setting new records every month. In August 2026, they increased by 15% to reach nearly ₹1.99 lakh crore. This impressive jump is primarily due to the next-generation reform (GST 2.0) implemented 10 months ago. 

The government made major changes to the tax structure on September 22, 2025. Since then, domestic consumption, imports, and exports have increased, and tax evasion has also been curbed through digital compliance.

Direct impact on the budget of the common man

The primary goal of GST 2.0 has been to ease the burden on the middle class. The insurance sector received the biggest relief. Individual health and life insurance premiums were made completely tax-free (0%). 

This is saving every family thousands of rupees annually. Building houses has also become cheaper. Lower taxes on cement and steel have reduced construction costs by 5% to 10%. Taxes on children's stationery and life-saving medicines have also been eliminated.

What is cheap and what is expensive in the market?

Under the new rules, the old complex slabs (5%, 12%, 18%, 28%) have been removed and only two main slabs (5%, 18%) have been kept. A 40% slab has been fixed for luxury goods. Essential items like bread, UHT milk, cheese, pencils are completely tax free (0%). 

Everyday items like hair oil, shampoo, soap have been reduced from 18% to 5%. Small cars, ACs, TVs larger than 32 inches have also been reduced from 28% to 18%. 

At the same time, items like cigarettes, tobacco, expensive luxury cars, private yachts have become expensive in the 40% slab. Sweetened beverages and gaming have also been kept in the expensive slab.

Important rules changed for businessmen

Rules for traders have been simplified and digitized. The introduction of two slabs has eliminated disputes over the classification of goods. Provisional refunds of up to 90% for exporters are being issued much faster. 

AI-based invoice matching has been introduced to prevent tax evasion. The GST Appellate Tribunal (GSTAT) has become fully operational to resolve old tax disputes.

A wonderful journey of month-on-month collections

The government's coffers have seen a steady increase over the past few months. This figure reached its highest level in April 2026. The figures below illustrate this steady growth.