Significant changes to India’s GST system have been announced. In a televised address yesterday, Prime Minister Narendra Modi described the new tax regime, effective from September 22, as next-generation GST reforms. He stated that this is a crucial step toward building an Atmanirbhar Bharat (Self-Reliant India).PM Modi referred to the reduction in Goods and Services Tax (GST) rates as the beginning of a GST festival. Dubbed GST 2.0, this second major reform to the GST system comes into effect today, encompassing a wide range of rate reductions.

1. GST Exemption for Life Insurance Policies:
   All individual life insurance policies, including term insurance, endowment policies, and unit-linked insurance plans (ULIPs), are now exempt from GST. Reinsurance for these policies is also exempt.

2. GST Exemption for Health Insurance:
   Individual health insurance policies, family plans, and specific health policies for senior citizens are now exempt from GST under GST 2.0. Zeneme Traditional Brass 18 K Gold Plated Wedding Jewellery Bahubali Inspired Long Chain Jhumki Earrings for Women and Girl

3. Tax Rates on Transportation Services:
   Passenger transportation by road will continue to attract a 5% GST rate without Input Tax Credit (ITC). However, operators can opt to pay 18% with ITC if desired. For air travel, economy class tickets will continue at 5% GST, while business and other premium classes will attract 18% GST.

4. GST on Local Delivery Services:
   For local delivery services provided by unregistered service providers through e-commerce operators (ECOs), the GST liability will shift to the e-commerce operator. If the delivery provider is registered under GST, they will be responsible for paying the tax. Deepika Out, Anushka In? What’s the Breaking News About Prabhas’ ‘Kalki 2898 AD’ Sequel?

5. Why No Full Exemption for Medicines:
   The Finance Ministry has clarified why medicines continue to attract a 5% GST instead of full exemption. A complete exemption would prevent manufacturers from claiming ITC on inputs like raw materials and packaging, increasing production costs.

6. GST on Leasing and Rentals:
   Leasing or renting goods without operators will attract the same GST rate as the sale of those goods. For example, if a car sale attracts 18% GST, leasing the car without a driver will also incur 18% GST. This principle applies to other goods as well.

   

7. GST Rates on Imports:
   Revised GST 2.0 rates will also apply to imports. Unless a specific exemption notification is issued, Integrated GST (IGST) will be levied at the new rates starting September 22.

8. Exemption for UHT Milk, Changes for Plant-Based Milk:
   Ultra High Temperature (UHT) processed dairy milk is now fully exempt from GST. However, this exemption does not apply to plant-based milk. Previously, almond milk and similar beverages attracted 18% GST, while soy milk was taxed at 12%. Under GST 2.0, all plant-based milk beverages, including soy milk, will now uniformly attract a 5% GST rate.

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1. GST Reduction on Face Powders and Shampoos:
   GST rates on face powders and shampoos have been reduced. The Finance Ministry clarified that this reduction is not designed to benefit large companies but aims to simplify the GST framework.

2. Citizen Benefits Through Tax Reductions:
   The GST 2.0 reforms focus on reducing the tax burden on essential goods and services, ensuring direct benefits for citizens and promoting affordability in daily essentials, insurance, and transportation.