GST 2.0: Tax Slashed on 413 Items, Relief Expected in Food, Health, Insurance Sectors

Rates of 413 out of 453 items have been reduced in GST 2.0. Tax has been increased on only 40 goods. There are about 295 such items on which only 5% or zero tax has been imposed instead of 12%. The SBI report estimates that the government will have a loss of only Rs 25,794 crore in 2026-27. A loss of only Rs 3,700 crore is estimated between the 6 months (October-March) of the current financial year. The report says that most of the 295 essential commodities on which the GST rate has been reduced from 12 to 5% or zero are food items.

In such a situation, retail inflation from this sector can come down by 0.25 to 0.30% in 2026-27. Rationalizing the rates of services is also expected to reduce inflation by 0.40 to 0.45%. In this way, a total reduction of 0.75% is expected. In the current financial year, the government will have a total loss of Rs 48,000 crore. But on the basis of an increase in consumption, it will be reduced to only Rs 3,700 crore in net terms. It will have no impact on the fiscal deficit. In the insurance sector, the abolition of GST will help in two ways. First, existing families can increase the sum assured in health insurance. Second, health and term insurance can attract first-time insurance buyers.

According to the report, there are 38 items that were taxed at 12%, but now it has become zero. Two items have been taxed from 18% to 5%. 9 items have been brought in the range of 5% to zero. 257 items were taxed at 12%. Now it has come down to 5%. 56 items have been brought in the range of 18 to 5%. 29 have been brought in the range of 28 to 18%. In IGST, 20 items have been taxed from 18 to zero.