The Goods and Services Tax (GST) marked a landmark reform in India’s indirect tax regime by subsuming multiple central and state taxes into a unified framework. However, persistent structural complexity, procedural rigidity, and high compliance costs have constrained its full potential. Against this backdrop, the concept of GST 2.0 has emerged as a proposed paradigm shift aimed at rationalising the tax structure while leveraging advanced digital technologies to enhance efficiency, transparency, and ease of compliance. This paper critically examines GST 2.0 as a reformative evolution rather than a replacement of the existing GST architecture. It analyses the historical rationale for GST reforms, the core principles underpinning GST 2.0, and the proposed structural and technological innovations, including simplified rate structures, reduced exemptions, e-invoicing, real-time data analytics, and risk-based compliance mechanisms. The study further evaluates the anticipated economic implications of GST 2.0 in terms of growth acceleration, revenue buoyancy, tax base expansion, and formalization of the economy, with particular attention to the impact on micro, small, and medium enterprises. Additionally, the paper identifies key challenges associated with implementation, such as legal constraints, technological readiness, and stakeholder adaptation, while drawing lessons from international GST models. By situating GST 2.0 within India’s broader macroeconomic and governance objectives, the paper argues that a carefully phased, technology-driven, and stakeholder-sensitive approach is essential for achieving a simplified, equitable, and sustainable indirect tax regime capable of supporting India’s long-term economic aspirations.
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