The Government of India has introduced GST 2.0, one of the biggest tax reforms since the launch of GST in 2017. Effective from 22nd September 2025, this new system is designed to simplify the tax structure, reduce costs for households, and give a boost to the economy.
But the big question on everyone’s mind is: Are insurances, medicines, and daily essentials getting cheaper? Let’s break it down.
What Changed in GST 2.0?
Earlier, India had four GST slabs (5%, 12%, 18%, and 28%). Now, these have been simplified into just two slabs – 5% and 18%, along with a special 40% slab for luxury and sin goods like tobacco and high-end cars.
This rationalization makes the tax system easier for both businesses and consumers.
Are Insurances Getting Cheaper Now?
Yes. One of the biggest reliefs for the middle class is that life insurance and health insurance premiums are now GST-exempt.
Earlier, customers had to pay 18% GST on insurance premiums, making policies more expensive. With GST 2.0, this burden is removed, encouraging more families to opt for health and life coverage. If you want one now in best rates, connect with us today: Vipulam FInancial Services – Insurance
What Essentials Got Cheaper?
GST 2.0 focuses on reducing the cost of everyday items.
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Food items, toiletries, and medicines are now in the 5% or even 0% slab.
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Household products like soaps, shampoos, detergents, and packaged food are taxed at a lower rate.
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FMCG products (fast-moving consumer goods) are now more affordable.
This reform is expected to bring down monthly household expenses, directly benefiting common families.
What About Consumer Durables and Automobiles?
Here’s another big win for consumers:
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Cars, two-wheelers, and household appliances like ACs, TVs, and washing machines, which earlier attracted 28% GST, now fall under the 18% slab.
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This makes big-ticket purchases more attractive, especially before the festive season.
What Got Costlier?
While essentials and insurance got cheaper, the government increased taxes on luxury and sin goods.
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High-end cars, aerated drinks, and tobacco now attract 40% GST.
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This ensures that the government still earns revenue while keeping basic necessities affordable.
Economic Impact of GST 2.0
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Inflation is expected to drop by around 1%, boosting consumer spending.
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Farmers and MSMEs benefit from lower tax on agricultural machinery and inputs.
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Stock markets have already reacted positively, especially in the auto and FMCG sector.
Overall, GST 2.0 is expected to increase demand, ease compliance, and support long-term economic growth.
Quick Summary – What’s Cheaper, What’s Costlier?
| Category | New GST Rate | Impact on Consumers |
|---|---|---|
| Life & Health Insurance | 0% | Insurance premiums become cheaper |
| Essentials & FMCG | 0% / 5% | Monthly expenses reduce |
| Medicines | 5% | Healthcare becomes affordable |
| Automobiles & Appliances | 18% | Big purchases cheaper |
| Luxury & Sin Goods | 40% | Costlier than before |
Final Thoughts
The GST 2.0 reform is clearly aimed at making life easier for the common man. From cheaper insurance and medicines to reduced household costs, this overhaul is a welcome change.
As the festive season approaches, consumers will feel the difference in their pockets, while India’s economy gears up for higher growth and demand.
If you’re wondering “Are insurances getting cheaper under GST reforms?” – the answer is a big YES.