GST 2.0 could undermine the health of food | Legacy Ias Academy

Why in the news

• By September 22, 2025India will implement GST 2.0 With a simplified structure:
  • Two main plates: 5% and 18%.
  • A special 40% “sinful/ultra-luxe” bracket.
• A lot of daily food (pizza bread, confectionery, chocolates, jam, jellies) will shift to Lower tax plates (5% or zero).
• Sent and sugar -based drinks will go to the 40% bracket.
• Concern: Although the GST simplifies, these changes can Undermining objectives for public health By making unhealthy food more affordable.

Relevance: GS III (Economy tax policy, public health, nutritional safety, non-transferable disease prevention).

From the base

• GST Basics:
  • Introduced in 2017 → “One Nation, One Tax” indirect tax reform.
  • Previous plates: 5%, 12%, 18%, 28%(+ CESS).
  • GST 2.0 → Rationalized to 5% and 18%of 40% SIN Tax For harmful/luxury goods.
• Non-transferable diseases (NCDs) in India:
  • Provide ~ 65% of the deaths (Who, MOHFW data).
  • Diet-related risk factors: high sugar, salt, fat consumption → obesity, diabetes, hypertension, cardiovascular disease.
• Front-of-Pack Labeling (FOPL):
  • Proposed by Fssai in 2022Still not completed.
  • Supreme Court (July 2025): ordered Fssai to complete the standards within 3 months.
  • Debate: Health Star Rating versus “High-In” Warning labels.
  • Who-Searo’s Nutrient Profile Model (NPM): recommends Category-based Afs For sugar, sodium, fats.
• Advertising rules (current):
  • HFSS food prohibited in the vicinity of schools (FSSAI 2020).
  • CCPA 2022 → Restrictions on misleading advertisements.
  • ASCI 2024 → Extensive disclosure standards.
  • Still no Extensive HFSS -Advertisement regulation Similar to chili or vk.

Extensive overview

Positive aspects of GST 2.0

• Simplification of structure → Reduces compliance with the compliance.
• 40% sin tax on aerous beverages → Get out with global best practices.
  • Studies (Asia, Africa) show 2.5–19% Consumption -Daling after sugar load.
• Can reformulation From sugary drinks if linked to labeling and advertising restrictions.

Public Health Problems

• Unhealthy food becomes cheaper:
  • Pizza bread (including Maida based) exempt.
  • Chocolates, jam, confectionery moved to 5%.
• Mismatch in taxation: Suggest drinks punished, but stimulated sugar -like foods.
• Risk of replacement: Adolescents can shift from loaded drinks to non -lured sugary snacks.

Weakness in regulating ecosystem

• Labels for labeling foods:
  • Without mandatory fopl, consumers cannot distinguish healthy versus unhealthy products.
  • “Per serving” labels misleading → need per 100 g/ml thresholds.
• Advertisement:
  • No restriction on HFSS ads about TV, social media, print.
  • Chile’s model (ban on child -oriented advertising for ‘high in’ foods) more effectively.

Policy corrections needed

• Link GST with fopl:
  • Products that violate “high in” thresholds → taxed 18% or higher.
  • Conforming products → taxed 5% or lower.
• Mandatory warning labels:
  • Tighten to whom Searo or ICMR-NIN thresholds.
  • Apply standards per quantity to prevent meshes.
• Stronger advertisement -Regulation:
  • Prohibition ads for “high in” products for children.
  • Limit advertisement slots during Peak hours.
• Use of income from Sunday tax:
  • Direct to NCD prevention, labeling enforcement, reformulation stimuli.

Long -term implications

• If not corrected, GST 2.0 could be able to do that Increase the NCD burdenTension in health care.
• Integrated approach needed: Tax policy + labeling + advertising regulations.
• India can one Global example By coordinating tax and health policy.