The overhauled Goods and Services Tax (GST) structure, effective from Monday, September 22, 2025, brings relief to consumers on a wide range of daily-use items while increasing levies on luxury and sin goods. The GST Council’s rationalisation plan simplifies tax slabs and lowers rates on 375 essential products, including food, personal care, household goods, electronics, medicines, and automobiles. At the same time, aerated drinks, premium vehicles, tobacco, and similar products now attract higher taxes.
Households will benefit from reduced prices on staples such as biscuits, butter, cereals, corn flakes, fruit pulp, ghee, jam, ketchup, paneer, pastries, sausages, and tender coconut water, as well as ice creams, dry fruits, fruit jellies, and namkeen.
Personal care items including toothpaste, shampoos, shaving creams, soaps, hair oils, face creams, and talcum powders have also moved into the reduced GST category. Packaged drinking water in 20-litre bottles, commonly used in households, is now more affordable.
Electronics such as televisions, washing machines, dishwashers, and air conditioners will see price reductions, while diagnostic kits and glucometers now attract a 5% GST, lowering retail prices at pharmacies. Wellness services including salons, gyms, health clubs, barbers, and yoga centres also benefit from the overhauled goods and services tax cuts.
The construction sector will gain from a reduced GST on cement (28% to 18%), potentially easing home prices in urban areas. In automobiles, a flat 40% GST (including cess) replaces the earlier 35–50% range, making cars more affordable in multiple segments.
However, higher taxes apply to aerated drinks, larger petrol and diesel vehicles, motorcycles above 350 cc, yachts, personal aircraft, racing cars, and tobacco products, all now under a 40% GST slab.
FMCG companies have already revised prices for consumers. Highlights include:
The new GST structure consolidates four slabs into two main rates (5% and 18%), with luxury and sin goods at 40%. Industry analysts predict strong festive-season demand and broader compliance may offset any initial revenue shortfall.
A senior FMCG executive noted, “This move has allowed companies to pass on immediate price benefits without disrupting supply chains.” The GST Council will review the impact in December 2025.
Consumers can now enjoy more affordable essentials while paying more for luxury and high-sugar products.
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