GST Council Meeting 2025: Food and FMCG Items Likely to Get Cheaper With New 5% Tax Slab

New Delhi, September 3, 2025 – The ongoing GST Council meeting is expected to bring major relief to households across India, especially in the food and FMCG categories. The government is working on restructuring GST slabs, and many daily essentials could soon become cheaper.

Food Products to Move to 5% GST Slab

Items like butter, cheese, pickles, jams, snacks, chutneys, and ready-to-eat packaged foods are likely to move from the current 12–18% GST slab to just 5%. This reduction will directly benefit consumers by lowering grocery bills and making packaged foods more affordable.

Staple packaged goods such as UHT milk, paneer, roti, paratha, and pizza bread may even move to a 0% GST rate, making them tax-free. This change is part of the government’s plan to rationalise rates and ease the burden on households.

FMCG Products Likely to See Big Relief

In the fast-moving consumer goods (FMCG) sector, the council is considering sharp tax cuts on products used daily in every home. Toothpaste, shampoos, talcum powder, and soaps, currently taxed at 18%, are expected to drop to the 5% GST slab.

This will bring down the cost of hygiene and personal care products significantly, especially benefiting middle-class households.

Why This Matters

The GST Council is working towards simplifying the tax system into fewer slabs. For households, this means:

• Cheaper grocery bills with reduced GST on packaged foods.
• Lower FMCG prices on soaps, shampoos, and toothpaste.
• Relief during the festive season when consumption of food and essentials usually rises.

Industry Impact

Experts believe the move will boost demand for FMCG companies and packaged food brands, while also increasing affordability for consumers. Retailers are expected to pass on the benefits directly to buyers once the new tax slabs are officially implemented.