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Stream/Area:
-
Subject:
-
Paper ID:
IJSREM67415
Volume:
10 |
9 |
Sep 2026
Pages:
1-8
Publication Frequency:
Monthly (12 issues per year)
License:International Journal of Scientific Research in Engineering and Management follows the Creative Commons Attribution 4.0 (CC BY 4.0) License, allowing free use and distribution with proper attribution.
COMMERCE
Swami Shukdevanand University, Shahjahanpur, Uttar Pradesh
The Goods and Services Tax (GST) is one of the major indirect tax reforms in India since its introduction in July 2017. The GST regime has been in a constant state of flux over the years regarding tax rates, compliance procedures, digital systems, registration, invoicing and dispute resolution. The reforms announced after the 56th meeting of the GST Council in September 2025 have been termed as the next phase or “GST 2.0” as they aim to simplify the rate structure, reduce the tax burden on several commonly consumed goods, improve ease of doing business, strengthen digital compliance and facilitate tax administration. The revised structure included a 5% merit rate, 18% standard rate and a special 40% rate for selected de-merit goods, with most revised rates to be effective from 22 September 2025. GST has a direct impact on retail traders, who form an important part of India’s distribution system, in terms of purchase prices, input tax credit, working capital, inventory management, pricing decisions, billing practices and compliance costs. GST 2.0 has the potential to cut the tax incidence on many products consumed by retailers, make classification easier and boost demand. Frequent changes in rates, issues with the valuation of inventory, technology needs, invoice management and reliance on tax experts may present transitional challenges, especially for small and micro retailers. This paper discusses the major features of GST 2.0 and analyses its likely implications for retail traders in India. The research design of the study is conceptual and analytical based on secondary information from government publications, GST council documents, official GST sources, economic reports and relevant literature. The paper argues that GST 2.0 for retail traders will be successful not only on the basis of rate reduction but also on the basis of stable tax policy, simple compliance procedures, effective digital infrastructure, timely refunds, accessible grievance mechanisms and taxpayer education.
KEYWORDS
GST 2.0 is a critical milestone in the ongoing transformation of India's indirect tax system. The reforms announced in 2025 are not just about lowering rates but also rationalising taxes, simplifying procedures, digitalising, facilitating trade and strengthening institutions. This is a major reshaping of the GST rate structure with a move to a 5 per cent merit rate and 18 per cent standard rate with a special rate of 40 per cent for certain de-merit goods and services. For retail traders, the importance of GST 2.0 lies in its possible impact on procurement costs, consumer prices, sales volume, inventory management, working capital, compliance expenditure and competitiveness. Lowering GST rates on a number of products that are widely used by consumers can help boost demand and give retailers more pricing flexibility. Simplification of registration procedures and other trade facilitation measures are of particular importance for small enterprises. At the same time, the benefits of GST 2.0 should not be taken for granted. Retail traders have to adapt to new tax rates, upgrade billing and accounting systems, manage old inventories and maintain accurate digital records. Dependence on technology and compliance capability are still significant challenges for micro and small retailers.
1. Government of India, Press Information Bureau. (2025). Recommendations of the 56th Meeting of the GST Council held at New Delhi. Ministry of Finance. 2. Government of India, Press Information Bureau. (2025). Frequently Asked Questions on the Decisions of the 56th GST Council. Ministry of Finance. 3. Goods and Services Tax Council. The GST Council: Evolution and Major Decisions. Government of India. 4. Goods and Services Tax Council. (2025). CGST Rate Notifications. Government of India. 5. Press Information Bureau. (2025). Frequently Asked Questions-3 on the Decisions of the 56th GST Council. Government of India. 6. Government of India. (2026). Economic Survey 2025–26. Ministry of Finance. 7. Press Information Bureau. (2025). Government Eases Compliance Burden on Industry While Ensuring Benefit of Reduced GST for Consumers. Ministry of Consumer Affairs, Food & Public Distribution. 8. Press Information Bureau. (2025). GST Grievance Redressal on National Consumer Helpline as Part of Next-Gen GST Reforms 2025. Ministry of Consumer Affairs, Food & Public Distribution.
Publication Date
9/24/2026
Peer Review Type
Double-Blind Peer Review
Review Rounds: 2
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The authors declare no conflict of interest related to this research work.
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