The central government has announced a major reshuffle in the Goods and Services Tax (GST) structure, which will come into effect on 22 September 2025. Under the new system, the tax burden on several everyday household products has been slashed, making them 10–15% cheaper. This comes as a big relief for families battling inflation and rising costs of daily essentials.

The updated GST rates target commonly used food and personal care items.

• Tax on butter, cheese, sweets, and salty snacks has been reduced from 12% to just 5%.

• Items like chocolates, biscuits, cornflakes, coffee, ice cream, bottled water, hair oil, shampoo, soap, shaving cream, and toothpaste will now attract only 5% GST instead of 18%.

This dramatic cut will directly reduce prices across kitchens and bathrooms, giving consumers much-needed relief. However, the tax on sugary drinks has been raised from 28% to 40%, in line with the government’s focus on discouraging unhealthy consumption.

Industry experts believe these reforms will significantly benefit FMCG giants such as Hindustan Unilever, ITC, Britannia, Dabur, Nestle, and Marico. With reduced prices, demand for packaged foods, beverages, and personal care items is expected to surge, giving companies an opportunity to expand their market share.

The reforms are also likely to intensify competition within the FMCG sector, encouraging brands to introduce new products and pricing strategies to attract more customers.

The new GST structure is not only consumer-friendly but also expected to streamline trade and distribution. Lower taxes will reduce pressure on businesses, particularly small sellers, distributors, and shopkeepers, making goods more affordable and readily available.

Experts predict that the move will strengthen supply chains, reduce compliance hurdles, and bring stability to retail pricing.

Inflation has been weighing heavily on households over the past few years, forcing many to cut down on essential purchases. The FMCG sector, in particular, witnessed sluggish growth as consumers became more price-sensitive.

With GST 2.0 lowering prices on a wide range of products, families are likely to spend more freely, boosting demand. Analysts believe this step will revive consumer sentiment, energize retail markets, and stimulate overall economic activity.