The Goods and Services Tax (GST) Council's decision to rationalize tax rates has brought welcome news for consumers in Ghaziabad and across India. Effective September 22, 2025, the revised GST slabs have led to price reductions on a wide array of daily essentials and consumer goods. This move is part of the broader GST 2.0 reforms aimed at simplifying the tax structure and easing the financial burden on households.
Impact on Fast-Moving Consumer Goods (FMCG)
The most significant change is the reduction in GST on many FMCG products from 18% to 5%. This includes essential personal care items such as shampoo, toothpaste, hair oil, and soaps. These changes are expected to make cosmetics more accessible and affordable for people.
Several FMCG companies have already announced price cuts to pass on the benefits of the reduced tax rates to consumers. For instance, Nestlé India has reduced the price of Maggi noodles (pack of 12) from ₹120 to ₹116. Hindustan Unilever has also reduced prices on Dove shampoo (340 ml) from ₹490 to ₹435. Dabur has cut the price of Real Juice (1 litre) from ₹130 to ₹122, Chyawanprakash (900 gm) from ₹475 to ₹440, and toothpaste from ₹153 to ₹135. Amul has lowered butter (100 gm) to ₹58 and ghee (1 litre) to ₹610.
NDTV reported from a Mother Dairy booth in Ghaziabad, where over 150 products have seen price reductions ranging from ₹2 to ₹30. This includes milk, butter, ghee, cheese, biscuits, coconut water, frozen foods, and snacks. Vendors have confirmed that companies are passing on the benefits directly to consumers.
Impact on Other Sectors
Besides FMCG, the GST rate cuts have also impacted other sectors. The GST on consumer durables like televisions, air conditioners, refrigerators, and washing machines has been reduced from 28% to 18%. This is expected to boost demand during the festive season. Electronics dealers anticipate a reduction of approximately 7.8% in the prices of air conditioners. For example, air conditioners in the ₹60,000 range would be cheaper by ₹3,500.
The automobile sector has also benefited from the GST rate cuts. Small cars with petrol engines up to 1200cc and diesel engines up to 1500cc now attract 18% GST, down from the earlier 28% plus cess. This translates to a significant price drop on models like the Maruti Suzuki Swift and Brezza. Luxury vehicles and large SUVs will now pay 40% tax instead of 43–50%.
The revised GST rates also extend to the healthcare sector. GST on medical devices such as diagnostic kits and glucometers has been cut to 5%, which could lead to price cuts. Pharmacies have been directed to revise their MRPs and ensure reductions are passed on immediately. Individual life and health insurance policies are now fully exempt from GST.
Challenges and Concerns
Despite the positive impact of the GST rate cuts, some challenges and concerns remain. A survey indicated that only 2 in 10 people received benefits from earlier GST rate cuts. Some respondents blamed manufacturers for not lowering maximum retail prices, while others blamed retailers for not reducing prices despite lower tax. This raises doubts about whether GST 2.0 will truly lighten household expenses. Experts say strong monitoring mechanisms are required to ensure manufacturers and retailers pass on tax savings to consumers.
Kerala has expressed concern over the GST rate cuts, warning that the state could lose ₹8,000-10,000 crore every year. Finance Minister KN Balagopal welcomed the move to two slabs of 5% and 18% but stressed that without a compensation mechanism, states will struggle to fund welfare programs.
Conclusion
The GST rate cuts are expected to provide much-needed relief to consumers in Ghaziabad and across India. The reduction in prices of essential goods and consumer durables is likely to boost consumption and contribute to the overall growth of the economy. However, effective monitoring and implementation are crucial to ensure that the benefits of the GST rate cuts are passed on to the consumers.
