New Delhi, Sept. 12 -- When the goods and services tax (GST) was introduced in 2017, it promised "one nation, one tax." Over time, though, it became cluttered-multiple rates, inverted duty structures and compliance fatigue-hurting micro, small and medium enterprises (MSMEs) on both the demand and supply sides.

The newly announced GST 2.0 seeks a reset: it collapses the system into two main rates (5% and 18%), with a 40% rate for luxury and sin goods, while reducing rates on essentials and correcting distortions.

The net impact- Rs.93,000 crore of revenue forgone from rate cuts, partly offset by Rs.45,000 crore from raising the top rate-amounts to a loss of about Rs.48,000 crore (on the 2023-24 consumption base).

Critics warn of fiscal ...