The rationalization of tax rates under the Goods and Services Tax represents a significant development in India’s indirect tax reform framework. This study examines the impact of GST rate rationalization (commonly referred to as GST 2.0 reforms) on essential commodity prices and household consumption patterns in Karnataka during the period 2024–2026. The primary objective is to analyse whether GST rate revisions have resulted in measurable changes in retail prices and whether these changes have influenced household consumption behaviour across income groups.

The study is based on secondary data collected from the Karnataka Economic Survey, Consumer Price Index (CPI) reports, household consumption expenditure data from the National Sample Survey Office, and publications of the Reserve Bank of India. Statistical tools such as trend analysis, correlation analysis, regression analysis, and price elasticity estimation are used to evaluate the relationship between GST rate revisions, commodity price trends, and consumption behaviour.

The findings indicate that GST rate rationalisation has contributed to moderate price stabilisation in selected essential commodities. However, the extent of tax pass-through to consumers varies across commodity groups. The analysis further reveals that consumption responses differ across income groups, with essential commodities displaying relatively inelastic demand compared to semi-essential goods. The study concludes that while GST reforms have had a measurable influence on price trends and consumption patterns, consumer welfare gains depend largely on efficient market mechanisms and effective transmission of tax benefits.

Keywords: GST, Tax Rationalization, Essential Commodities, Household Consumption, Karnataka, CPI, Price Elasticity.