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GST 2.0 takes effect: Key tax cuts and reforms you should know

GST 2.0, India’s next generation of Goods and Services Tax reforms, takes effect from September 22. The overhaul brings wide-ranging changes including exemptions on insurance, lower GST on face powders and shampoos, and revised rates for medicines, milk, and delivery services. Here’s a detailed look at the key updates

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GST

India’s biggest overhaul of the Goods and Services Tax (GST) since its rollout in 2017, dubbed “GST 2.0”, officially comes into force today. The reform package, announced by Prime Minister Narendra Modi in a 19-minute televised address yesterday, has been described as the country’s “next generation GST reforms” — a move aimed at simplifying the tax structure and boosting consumer confidence ahead of the festive season.

Here are the major highlights of GST 2.0:

1. Life Insurance Policies Made GST-Free

All individual life insurance products — including term insurance, endowment policies, and ULIPs — are now fully exempt from GST. Reinsurance for these products has also been brought under the exemption.

2. Health Insurance Gets Relief

Individual health insurance policies, family floaters, and senior citizen health covers are exempted from GST, reducing costs for policyholders.

3. Transport Services

  • Road transport: Passenger transport by road will continue at 5% without ITC, but operators can opt to pay 18% with ITC.
  • Air travel: Economy class remains taxed at 5%, while business and premium classes continue at 18%.

4. Local Delivery Services

GST liability on deliveries made via e-commerce operators (ECOs) shifts to the ECO when services are provided by an unregistered vendor. If the provider is registered, they remain liable. Delivery services will attract a standard 18% GST.

5. Medicines Stay at 5%

The Finance Ministry clarified that medicines remain under the 5% GST slab rather than being exempted. A full exemption would block manufacturers from claiming input tax credits (ITC), raising production costs and retail prices.

6. Leasing and Renting of Goods

Leasing or renting goods without an operator will attract the same GST rate as the goods themselves. For instance, leasing a car without a driver will be taxed at 18%, matching the rate on car sales.

7. Imports Covered Under GST 2.0

The revised GST rates also apply to imports. Integrated GST (IGST) will be levied at the new rates unless specific exemptions are notified.

8. Milk Products: Dairy vs Plant-Based

  • Exempted: Ultra High Temperature (UHT) processed dairy milk.
  • Taxed at 5%: All plant-based alternatives such as almond milk and soy milk, which previously faced higher slabs of 12–18%.

9. Personal Care Products

GST rates on face powders and shampoos have been reduced, a move the Finance Ministry says is meant to simplify the framework rather than favour large corporations.

10. Toward “Atmanirbhar Bharat”

PM Modi hailed GST 2.0 as a decisive step toward a self-reliant India, stressing that the new framework will make compliance easier, cut costs for consumers, and strengthen India’s economic ecosystem.

India News

Amit Shah praises Dharmendra Pradhan’s resignation, says Nation above post

Amit Shah hailed Dharmendra Pradhan’s resignation as Union Education Minister, saying BJP places the nation and students above any position while highlighting the government’s commitment to examination reforms.

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Amit Shah

Union Home Minister Amit Shah on Saturday praised Dharmendra Pradhan’s decision to step down as Union Education Minister, saying the move reflected the Bharatiya Janata Party’s commitment to placing the nation and students above any political position.

In a post on X, Shah said that for BJP workers, the country, its youth and students are more important than any office. He described Pradhan’s resignation as an example of the party’s guiding principle of prioritising national interest over personal ambition.

Shah highlights government’s focus on exam reforms

Amit Shah said the Narendra Modi-led government respects the sentiments of students and remains committed to strengthening the examination system following concerns over alleged paper leaks.

He said the Centre has introduced strict measures to ensure severe punishment for those involved in examination paper leaks and expressed confidence that these steps would deliver justice to students who cleared the National Eligibility-cum-Entrance Test (NEET).

Praises Pradhan’s work as Education Minister

Recalling Dharmendra Pradhan’s tenure, Shah highlighted several initiatives undertaken during his time in the Education Ministry. He credited Pradhan with helping implement the National Education Policy (NEP), expanding PM SHRI schools, promoting digital education, strengthening skill development and improving coordination between industry and academic institutions.

Shah also said Pradhan worked towards making examinations more inclusive and student-centric, adding that his tenure reflected his commitment to the vision of a developed India.

Resignation follows NEET controversy

Dharmendra Pradhan’s resignation comes amid nationwide protests over alleged irregularities in the NEET examination and growing demands for accountability.

The resignation has triggered political reactions across party lines. While opposition parties have described the development as a result of sustained student protests, BJP leaders have projected it as an example of accountability and commitment to national interest.

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Assam flood death toll rises to 66, over 6.5 lakh people still affected

Assam’s flood situation improved slightly on Saturday, but more than 6.54 lakh people remain affected in six districts. Four fresh deaths have pushed the state’s flood toll to 66.

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Assam floods

The flood situation in Assam showed marginal improvement on Saturday, though the disaster continued to impact more than 6.54 lakh people across six districts. Four more deaths were reported during the day, taking the total number of fatalities in this year’s floods to 66.

According to the Assam State Disaster Management Authority (ASDMA), three of the latest deaths were reported from Sivasagar district, while one person lost their life in Charaideo.

The number of affected people declined from over 7.05 lakh across nine districts on Friday to 6,54,800 across six districts on Saturday, indicating a gradual improvement in the overall situation.

Sivasagar remains the worst-hit district

Among the affected districts, Sivasagar continues to be the worst hit, with nearly 2.9 lakh people impacted by the floods. Charaideo follows with around 1.9 lakh affected residents, while more than 1.3 lakh people remain affected in Jorhat.

The other districts still facing flood-related challenges are Dibrugarh, Golaghat and Nagaon.

Relief operations continue across affected areas

The ASDMA said the state administration is operating 274 relief camps and aid distribution centres across the affected districts. Around 18,902 displaced people are currently taking shelter at these facilities.

The latest daily bulletin also stated that floodwaters have inundated 810 villages across the state, while 34,970.8 hectares of agricultural land have suffered damage.

Rivers flowing above danger level

The floods have also damaged embankments, roads, bridges and other public infrastructure in several areas.

Authorities said the Dikhou River in Sivasagar and the Dhansiri River at Numaligarh are flowing above the danger level, and officials continue to closely monitor the situation.

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UP Government forms new SIT led by 3 IPS officers to probe Ayodhya Ram Temple donation theft

The Uttar Pradesh government has formed a new SIT led by three IPS officers to investigate the alleged Ram Temple donation theft case in Ayodhya following Supreme Court directions.

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Ram Mandir

The Uttar Pradesh government has reconstituted a Special Investigation Team (SIT) headed by IG Kiran S, with DIG Somen Verma and SSP Dr Gaurav Grover as members, to investigate the alleged theft of donations meant for the Ram Temple in Ayodhya. 

The move comes after directions from the Supreme Court, which sought a reconstituted investigation team to ensure an independent and comprehensive probe into the allegations.

The newly formed SIT is expected to continue the investigation and submit a status report before the Supreme Court on July 27.

Senior IPS officers to lead the probe

According to the state government, the investigation will now be supervised by senior IPS officers.  The revamped SIT has been tasked with examining all aspects of the alleged embezzlement of temple donations and carrying the investigation forward.

The Supreme Court had observed that criminal investigations and technical examination of theft-related cases are more effectively handled by experienced police officers, leading to the reconstitution of the SIT under senior IPS leadership.

Probe to continue under court supervision

The case relates to the alleged embezzlement of offerings (chadhava) donated by devotees at the Shri Ram Janmabhoomi Temple in Ayodhya.

The Supreme Court is monitoring the investigation and will review the SIT’s status report at the next hearing.

Authorities are expected to continue examining evidence collected during the earlier stages of the investigation as the newly constituted SIT proceeds with the case.

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