GST 2.0 May Cut Prices On Food, Clothes & Daily Goods, Council To Decide In September

New Delhi: The GST Council is preparing for major changes under a new plan called GST 2.0. This plan will be discussed during a meeting in New Delhi on September 3–4.

The 56th Meeting of the GST Council will be held on 03rd & 04th September, 2025 at New Delhi

— GST Council (@GST_Council) August 23, 2025

More Products May Become Tax-Free

One of the key proposals is to increase the number of items that come under the “nil” GST rate — that means zero percent tax. Right now, many food products are taxed at 5 percent or even 18 percent. Under GST 2.0, items like UHT milk, pre-packaged paneer (chena), pizza bread, khakhra, chapati, and roti could become completely tax-free. Paratha and parotta, which are currently taxed at 18 percent, may also move to the zero-tax category.

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School Supplies Could Become Cheaper

The government is also thinking about removing GST on several school-related items. This includes things like maps, globes, atlases, printed charts, pencils, sharpeners, exercise books, and lab notebooks. These items currently fall under the 12 percent tax slab. If GST is removed, these supplies will become more affordable for students and families, making education costs lighter.

Lower Taxes on Popular Food Items

Many food products that are currently taxed at 12 percent could soon be taxed at only 5 percent. These include items such as butter, condensed milk, jams, mushrooms, dry fruits like dates and nuts, and namkeens. These are used daily in Indian homes and by sweet shops, bakeries, and food companies. With a lower GST rate, these products would become cheaper for everyone.

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Chocolates and Ice Cream May Also Get Cheaper

Even indulgent items like chocolates, pastries, breakfast cereal flakes, and ice cream may see a tax cut from 18 percent to just 5 percent. These are common treats in urban homes and also popular in India’s growing café and bakery culture. Reducing GST on these items would help both businesses and customers.

Big Benefits for Clothing and Farming

The textile sector is also expected to benefit. Woven fabrics, cotton, wool, hosiery, and mixed textiles may get a lower GST rate of 5 percent. This will help reduce clothing costs in the market and also help small businesses by improving their cash flow.

For farmers, the proposal includes reducing GST on fertilisers like urea, DAP, MOP, SSP, and other complex fertilisers from 12 percent to 5 percent. This would lower the cost of farming and improve the use of government subsidies.