The government’s ambitious Goods and Services Tax (GST) 2.0 officially kicked in today, marking the most significant reform since GST was first introduced in 2017. The revamp brings sweeping tax cuts, exemptions, and policy changes aimed at easing costs for consumers while simplifying compliance for businesses.

The GST Council, which approved the changes on September 4, has replaced the old four-tier tax system (5%, 12%, 18%, 28%) with a simpler two-tier structure of 5% and 18%. Ultra-luxury goods will now attract 40%, while sin goods like tobacco continue at 28% plus cess.

Here are the 10 key takeaways under GST 2.0:

1. Life Insurance Now GST-Free
   Term plans, endowment policies, ULIPs, and even reinsurance are exempt from GST.

2. Health Insurance Fully Exempt
   Individual, family, and senior citizen policies are now GST-free to make healthcare more affordable.

3. Passenger Transport Rules
   Road transport taxed at 5% (without ITC) or 18% (with ITC). Economy flights remain at 5%, premium at 18%.

4. Local Delivery via E-Commerce
   For unregistered providers, GST liability shifts to the platform. Services taxed at 18%.

5. Medicines Retain 5% GST
   No exemption, as the Finance Ministry says removing tax would block manufacturers from claiming ITC.

6. Leasing & Renting Goods
   GST on leases will now equal the tax rate applied to the sale of those goods (e.g., cars at 18%).

7. Imports under New Rates
   IGST on imports will follow the revised 2.0 structure unless exempted.

8. Tax Changes for Milk Products
   UHT milk exempted; plant-based alternatives like soy, almond, oat milk taxed at 5% (down from 12–18%).

9. Personal Care Products Cheaper
   GST slashed on shampoos, face powders, and other items for a streamlined structure.

10. FMCG Price Cuts
    Companies like Dabur, Nestlé, ITC, and HUL have already cut prices—Real Juice (1L) now Rs 122 (down from Rs 130), Nescafé Classic (45 gm) down to Rs 235 (Rs 30 cheaper).