The Government of India has rolled out GST 2.0 India from September 22, 2025, right at the start of Navratri. This major tax reform simplifies the structure and reduces prices on a wide range of products—from groceries and personal care to cars and electronics.
Let’s explore how GST 2.0 India affects your shopping list and household budget.
Everyday Essentials Under GST 2.0 Goods That Got Cheaper
The biggest relief is for households, as daily-use grocery items now come at lower prices.
- Milk, Paneer, Roti, Bread: Tax has been completely removed (5% → 0%). For example, a ₹45 item might now cost around ₹43.
- Butter, Ghee, Cheese: Earlier taxed at 12–18%, now in the 5% slab, reducing a ₹200 pack to about ₹180.
- Namkeen, Chocolates, Dry Fruits: Also moved to the 5% category, making indulgence more affordable.
- Plant-Based Milk (Soya Milk): GST has dropped from 12–18% to just 5%.
Impact on Electronics and Gadgets
The reform extends beyond groceries into personal care and household products.
- Soap, Shampoo, Toothpaste: GST cut from 18% to 5%—a ₹100 item may now be priced at ₹85.
- Packaged Foods (Biscuits, Juices): Lowered to 5%, from 12–18%.
- Electronics (TVs, ACs, Refrigerators, Dishwashers): GST reduced from 28% to 18%. An ₹18,000 fridge may now cost around ₹16,000.
- Washing Machines: Also moved down to 18% GST, saving ₹2,000–₹2,500 on a ₹25,000 machine.
Cars and Bikes Get Cheaper with GST 2.0 India
One of the most exciting changes is in the automobile sector.
- Small Cars (<4m, <1200cc): Tax reduced from 28% to 18%, bringing down a ₹7.5 lakh car to around ₹6.85 lakh.
- SUVs and Luxury Cars: The previous 28% GST + 22% cess (≈50%) is now replaced by a flat 40% GST. A ₹20 lakh car could drop to about ₹19 lakh, while SUVs like the Fortuner may see ₹3–4 lakh cuts.
- Two-Wheelers: Motorcycles and scooters also get cheaper, with ₹8,000–₹10,000 savings.
Insurance Premium Relief in GST 2.0 India
Financial protection is now more affordable thanks to tax exemptions.
- Life Insurance & Health Insurance: GST reduced from 18% to 0%, making premiums cheaper and encouraging more families to secure policies.
- Other Insurance (Car, Home, Travel): Rates remain unchanged.
(For details, visit the IRDAI official website.)
Luxury Goods and Sin Taxes in GST 2.0 India
Not everything is cheaper. Luxury and sin goods now face higher taxes.
- Tobacco, Alcohol, Premium Luxury Products: GST has been raised from 28% to 40%, pushing prices higher.
What GST 2.0 India Means for Consumers and the Market
- For Consumers: Expect lower bills at grocery stores, electronics shops, and car showrooms.
- For Businesses: FMCG and electronics demand is set to rise during the festive season.
- For Insurance: The removal of GST could boost long-term policy adoption.
- For Luxury Market: Higher prices may slow down purchases of premium items.
Final Word
GST 2.0 India is a game-changer for households, making essentials, personal care, cars, and electronics more affordable. With the festive season approaching, this reform promises to boost both consumer savings and market demand—though luxury buyers may face higher costs.
For the official breakdown of tax rates, check the Government GST Portal.
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