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      Question

      Following the 56th GST Council meeting in late 2025, a

      significant structural reform termed "GST 2.0" was implemented. What is the primary feature of this reform?
      A Introduction of a single 12% flat rate for all goods. Correct Answer Incorrect Answer
      B A two-tier rate structure with 5% for essentials and 18% for most other goods. Correct Answer Incorrect Answer
      C Exemption of all luxury goods from GST. Correct Answer Incorrect Answer
      D Abolition of the GST Appellate Tribunal. Correct Answer Incorrect Answer

      Solution

      Following the 56th GST Council meeting on September 3, 2025, the primary feature of the "GST 2.0" structural reform is the rationalization of the tax rate structure into a simplified three-tier framework (5%, 18%, and 40%), which effectively replaced the previous four-slab structure (5%, 12%, 18%, and 28%) Key Aspects of GST 2.0 (Effective Sept 22, 2025):  Two Main Slabs + Merit/Sin Rates: The core of the reform involves consolidating most goods and services under two main rates: a 5% merit rate (for essential items) and an 18% standard rate (for most other goods and services). Sin and Luxury Tax: A special de-merit rate of 40% was introduced for luxury and sin goods, such as tobacco products, pan masala, and high-end vehicles.

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