These Essentials Will Now Face 0% Tax Following GST Reforms: From Roti To Cancer Drugs
One of the most notable shifts under GST 2.0 is the removal of GST on a wide range of everyday food products consumed across Indian households.
The 56th meeting of the Goods and Services Tax (GST) Council has unveiled a sweeping set of reforms under what the government is calling GST 2.0, a regime that expands the list of goods and services exempted from tax.
The decision, seen as one of the most significant changes since the introduction of GST, places several essential categories—including food, medicines, education materials, and insurance—into the 0 per cent tax bracket.
Everyday Food Products Now Cheaper
One of the most notable shifts under GST 2.0 is the removal of GST on a wide range of everyday food products consumed across Indian households. Items such as Ultra-High Temperature (UHT) milk, pre-packaged and labelled chena or paneer, and all varieties of Indian breads, including chapati, roti, paratha, parotta, khakhra and pizza bread have been moved to the nil tax rate. The exemptions are expected to make basic nutrition staples more affordable for consumers while offering relief at a time of rising household expenses.
Healthcare and Insurance at Nil Rate
Healthcare has been given particular emphasis in the new tax framework. Thirty-three life-saving drugs and medicines that previously carried a 12 per cent tax have now been exempted entirely. In addition, three specialised drugs used in treating cancer, rare diseases, and chronic conditions—which earlier fell under the 5 per cent GST slab—are now tax-free.
Insurance has also been brought into the 0 per cent fold. All health and life insurance policies, including family floater and reinsurance plans, are now exempt from GST. This reform is designed to make insurance products more affordable and to encourage wider adoption among households.
Relief for Students and Schools
The education sector is another beneficiary of GST 2.0. A range of stationery and academic materials have been exempted from tax. Items such as uncoated paper and paperboard for exercise books, laboratory notebooks, and graph books will now be available at lower costs. The exemption extends to maps, atlases, wall maps, globes, and other educational tools.
Students and parents will also find relief in exemptions granted on everyday stationery. Pencils, erasers, sharpeners, crayons, pastels, drawing charcoals, and tailor’s chalk are all now part of the 0 per cent tax bracket. Even handmade paper and paperboard have been included in the tax-free list, reflecting a push to support traditional crafts alongside mainstream education.
Defence and Aviation Imports Exempted
Beyond household and educational goods, the Council has granted exemptions in areas linked to national defence and aviation. Integrated GST (IGST) will no longer apply on imports of flight motion simulators, target motion simulators, components of missiles, rockets, drones, unmanned vessels, and specific military aircraft such as the C-130 and C-295MW. Other items like deep submergence vessels, sonobuoys, and high-performance batteries also fall within this category.
The exemptions extend to the import of technical documentation for these products, ensuring smoother procurement and operational readiness. Additionally, the tax has been waived on natural cut and polished diamonds up to 25 cents under the Diamond Imprest Authorisation, as well as works of art and antiques brought in for exhibitions.
A Sweeping Reform with Wide Reach
By exempting essential commodities and strategic imports from GST, the Council’s decision under GST 2.0 is set to impact both everyday households and critical national sectors. From lowering the cost of food, medicines, and insurance to easing expenses in education and supporting defence needs, the reforms mark a significant reshaping of India’s tax structure. Policymakers believe the changes will not only lighten the load on consumers but also strengthen demand and streamline compliance for businesses.
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