11 months ago
GST 2.0 Brings Price Cuts on Insurance, Food, and Drinks
The government changed the Goods and Services Tax (GST) to make things simpler.
This new GST 2.0 has only two tax rates: 5% and 18%.
Because of this, many food and drink items are now cheaper.
For example, Maggi, Amul products, and Nutella have reduced prices.
Additionally, health and life insurance policies have GST removed, saving people money.
However, it could mean that insurance companies have to raise the base premium to make up for it.
These changes aim to make things more affordable for people and improve the economy.
GST 2.0 simplified the tax structure to two rates: 5% and 18%.
Insurance premiums for individual life and health are now exempt from GST.
Many FMCG brands, including Dabur, Maggi, and Amul, have reduced prices.
Nutella, Ferrero Rocher, and Aquafina are among the products with price cuts.
The impact on policyholders may not be as large as the initial GST cut, but it still delivers savings.
- Who
- Indian Government, FMCG companies, Insurance Providers
- What
- GST 2.0 Reforms
- Where
- India
- When
- Implemented September 22, 2025
- Why
- To simplify tax structure and encourage consumer spending.
Insurance Companies
Consumers
Impact on Costs
Insurance Companies
Exemption from GST leads to the loss of ITC, potentially increasing operational costs.
Consumers
Lowering the cost of insurance premiums to encourage consumer savings.
Key facts
- GST Reform Name
- GST 2.0
- GST Slab Simplification
- 4 to 2 (5% and 18%)
- Insurance GST Exemption
- Individual life and health premiums
- Nutella Price Cut
- ₹50
- Aquafina Price Cut
- ₹2
- Maggi Price Cut
- ₹4
Timeline
GST Council convened to simplify tax rates.
Then, the government aimed to cut prices on daily goods.
Consumers may benefit from the planned 'GST savings festival'.
Quotes
Manju Dhake
Head – Insurance Advisory Practice at 1 Finance
“As of 22 September 2025, individual life and health insurance policies in India will be exempt from GST. This will directly reduce the burden on policyholders.”
businesstoday.in
“The removal of ITC means that insurers will bear higher operational costs, since GST on inputs becomes a sunk expense.”
businesstoday.in
Sources
Will GST Make Homes Affordable For Mumbaikars?
'Stop whining, cut premiums': Sanjeev Sanyal tells insurers to pass on GST benefits
Sanjeev Sanyal counters popular perception: 'Union Govt is too small, not too large'
Opinion | GST Reforms: Modi’s Masterstroke In Behavioural Economics
GST exemption cuts insurance premiums by up to Rs 3,050, actual savings may average to Rs 900; check details
GST 2.0 will bring down grocery bills by 13 pc, Rs 70,000 savings on small car purchases
GST restructuring revolutionary step towards simpler, fairer tax system: Jagan
UP braces for challenges in implementing GST rate cuts
New GST rates 2025: Milk, butter, paneer and other – List of essentials items with revised GST per centage
