GST 2.0 Sector Wise Impact

The GST 2.0 proposal highlights how different sectors of the economy may be impacted by changes in tax slabs. Here’s a clear breakdown in simple language for your blog:

Food & Beverages: Taxes on packaged foods and dairy are being reduced from 12–18% to just 5%. This means consumers will pay less for daily essentials, which is a big positive for FMCG companies as demand will increase.

Consumer Durables: The tax on white goods like ACs, fridges, and TVs is coming down from 28% to 18%. This makes these products more affordable for the middle class, boosting demand and sales in this sector.

Automobiles: Small cars and two-wheelers will also see a tax reduction from 28% to 18%. This brings relief to vehicle manufacturers, especially in rural areas where two-wheeler demand is strong.

Construction: Cement GST is being cut from 28% to 18%. This can lower prices by 7–8%, which will support infrastructure projects and housing growth.

Healthcare: Health insurance will be taxed at just 5% instead of 18%, and medical items will drop from 12% to 5%. This will make healthcare more affordable, particularly for senior citizens and low-income groups.

Textiles & Footwear: Mid-range apparel and footwear, which previously attracted 12–18% tax, will now be charged at only 5%. This could lead to strong demand growth and better profit margins for companies.

Agriculture: Irrigation equipment will see a tax cut from 12% to 5%, which will help improve rural productivity.

Hotels: A uniform GST slab of 5% or 18% is being proposed. This may benefit premium hotels through tax credits, but budget hotels could face challenges.

Renewable Energy: Solar components will be placed under lower tax slabs, encouraging faster adoption of clean energy.

Luxury & Sin Goods: Tobacco, liquor, and online gaming will attract a much higher GST of 40%. This is aimed at discouraging harmful consumption while also generating additional tax revenue.

In summary: GST 2.0 is designed to make essential goods and services cheaper, promote middle-class affordability, boost rural demand, and encourage clean energy adoption, while putting heavier taxes on luxury and harmful items.