Ahead of the GST 2.0 rollout on September 22, companies are offering steep discounts, extra quantity, and vouchers to attract customers. Following the 56th GST Council meeting, over 375 goods will see lower rates, and firms are urged to pass the full benefits to consumers. While small businesses and auto dealers raised concerns about transitional issues, early signs show most price cuts are reaching shoppers, especially in the FMCG sector for food items now exempted or under the 5% GST slab.
After the GST rate cuts, several food products have become cheaper:
Paneer: Amul and Mother Dairy reduced the price of a 200 g packet from Rs 95 to Rs 92 because paneer is now exempt from GST (previously 5%).
Milk: UHT milk cartons are cheaper — Mother Dairy’s milk is Rs 75 per litre (down from Rs 77) and Amul Milk Gold is Rs 80 per litre (down from Rs 83).
Butter Khakra: 200 g of Amul butter khakra is now Rs 95 instead of Rs 100.
Cheese Onion Paratha: Price dropped from Rs 240 to Rs 200 after its GST fell from 18% to 0%.
Amul and Mother Dairy have cut prices following GST reductions: 200 g paneer is now Rs 92, UHT milk Rs 75–80 per litre, 200 g butter khakra Rs 95, and Amul cheese onion paratha Rs 200, reflecting exemptions or lower GST rates.
Following GST cuts, several FMCG products are now cheaper: butter and cheese slices are 6% cheaper, ketchups, ghee, pickles, and jams are 4–8% lower, and Pringles (107 g) is 12% cheaper at Rs 110. Kellogg’s corn flakes (900 g) and Sunfeast Marie Light biscuits (≈1 kg) are down 11–12%. Ice creams are also cheaper, with Mother Dairy’s 50 ml vanilla cup at Rs 9 and 100 ml butterscotch cone at Rs 30, a 14% reduction.
Besides food, several everyday household products—like shampoo, soap, hair oil, and toothpaste—have had their GST cut from 18% to 5%. As a result, major brands such as L’Oréal, Himalaya, Close-Up, and Dove have reduced their prices by 11–13%.
Economists from Bank of Baroda noted that the GST cuts are a major boost for consumption, reducing inflation and giving consumers more room to save or invest. The price reductions are expected to further strengthen demand across sectors already showing signs of revival this fiscal year.
Some non-household but essential items, like cement, will become about 10% cheaper due to the GST cut from 28% to 18%. Major cement producers such as JK Cement and UltraTech have pledged to pass the full benefit to buyers. Lower cement prices are important because construction drives many sectors, including MSMEs that supply materials for buildings.
Similarly, health and life insurance premiums could drop by around 15% after the GST Council exempted them from the 18% tax. Insurance companies have promised to pass these savings to customers.
Prices of appliances like Whirlpool air conditioners and dishwashers have been cut significantly—air conditioners by Rs 4,500–5,250 and dishwashers by Rs 3,280–4,340—thanks to the GST reduction.
Cars like Maruti Suzuki, India’s largest carmaker, are passing on the GST benefits, reducing prices across its lineup by Rs 46,400 to Rs 1.29 lakh. Small cars now have an 18% GST (down from 28%), while bigger cars are taxed at 40% instead of up to 50% with the previous cess.
Challenges for dealers
Dealers who bought cars at the old GST rates faced difficulty selling them between September 3 and 22, as customers waited for lower prices. To sell these cars, huge discounts were offered, potentially resulting in losses of around Rs 2,500 crore.