Effect of GST Decrease on Daily Necessities in Common Man's Life

The 56th GST Council Meeting, convened on September 3, 2025, will be an important event in India's indirect taxation landscape. By announcing a reduction in Goods and Services Tax (GST) on daily necessities, the government has blazed a path that will directly affect the lives of millions of households.

Daily essentials, including dairy and staples, and essentials such as medicines and personal care products, have been revised with new GST rates effective September 22, 2025, bringing a new meaning to relief for the common man.

1. Milk & Dairy Products

• UHT Milk - Old Rate: 5% → New Rate: Nil
• Paneer (packaged) – Old Rate: 5% → New Rate: Nil
• Butter, Ghee, Cheese – Old Rate: 12% → New Rate: 5%

Impact: By removing tax, or reducing GST on essential dairy, participants are given access to basic nutritional foods at lower costs, especially medium- and low-income households, school-going children, and families that depend on dairy in their daily menus.

2. Fruits, Vegetables, and Staples

• Dry Fruits (almonds, pistachios, cashews, etc.) – Old Rate: 12% → New Rate: 5%
• Dates, Figs, Mangoes (dried) – Old Rate: 12% → New Rate: 5%
• Cereals, Pasta, Corn Flakes – Old Rate: 12-18% → New Rate: 5%
• Khakhra, Roti, Chapathi, Pizza Bread – Old Rate: 5% → New Rate: Nil

Impact: Lowering the prices of staples means access to balanced meals. Tax exemption on staples, including traditional Indian breads like roti and chapathi, has an especially good impact for the kitchens of the common man.

3. Sugar and Confectionery

• Sugar and Sugar Cubes - Old Rate: 12% → New Rate: 5%.
• Chocolates & cocoa based products - Old Rate 18% → New Rate 5%.
• Biscuits, cakes & Pastries: Old Rate 18% → New Rate 5%.

Impact: Families will be saving significantly on snacks and children’s items. By lowering tax on sugar and biscuits, cheap sources of energy will be made easier for poorer families to use.

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4. Medicines and Healthcare essentials

• Life saving drugs (only drugs that cure or save lives such as Onasemnogene, Daratumumab, Emicizumab etc) - Old Rate: 12% → New Rate: Nil.
• General Medicines (including ayurvedic, homeopathic and allopathic medicines) Old Rate 12% → New Rate 5%.
• Medical Grade Oxygen, Bandage, Gauze, Diagnostic Kits - Old Rate: 12% → New Rate: 5%.

Impact: The affordability of healthcare is significantly enhanced. Reducing the rate on life saving drugs allows access to critical treatments, while basic healthcare supplies like bandages and oxygen are now less expensive for hospitals and patients.

5. Personal Care and Hygiene

• Toilet Soap -Old Rate 18 % → New Rate 5%.
• Toothpaste, Tooth Powder - Old Rate 12-18% → New Rate 5%.
• Shampoo, Hair Oil - Old Rate 18% → New Rate 5%.
• Sanitary & Surgical Goods - Old Rate 12% → New Rate 5%.

Impact: Personal care items now affordably reduced will positively impact every household. The cheaper costs of basic hygiene will facilitate public use and will play a key part in supporting work in public health.

7. Beverages

• Drinking Water (20L bottles) - Old Rate: 12% → New Rate: 5%
• Plant-Based Milk and Soya Milk Drinks - Old Rate: 12-18% → New Rate: 5%
• Fruit Juice-Based Drinks - Old Rate: 12% → New Rate: 5%

Impact - More affordable options for clean drinking water and healthier beverages will support better nutrition options and reduce reliance on uncertain sources.

8. Education and Stationery

• Exercise Books and Notebooks and Graph Books - Old Rate: 12% → New Rate: Nil
• Pencils and Crayons and Chalk - Old Rate: 12% → New Rate: Nil
• Mathematics and Geometry Sets - Old Rate: 12% → New Rate: 5%

Impact - The cost of all education related goods will directly benefit students and families. This change to reduce the price for education related goods ensures students have access to basic utility tools, allowing schooling to become more affordable and aligns with the government's objective to improve literacy.

9. Broad Household Needs

• Candles - Old Rate: 12% → New Rate: 5%
• Cooking Utensils (Steel/Copper/Aluminium) - Old Rate: 12% → New Rate: 5%
• Feeding Bottles & Nipple - Old Rate: 12% → New Rate: 5%
• Bicycles - Old Rate: 12% → New Rate: 5%

Impact - Daily household essential items and greener modes of transport are now cheaper, supporting family budgets and sustainability.

10. Food and Nutrition

• Namkeens and Bhujia and Mixture and Chabena - Old Rate: 12% → New Rate: 5%
• Paratha/Parotta and Other Indian Breads - Old Rate: 18% → New Rate: Nil
• Tender Coconut Water (packaged) - Old Rate: 12% → New Rate: 5%
• Soups and Curry Pastes, Sauces and Mayonnaise - Old Rate: 12-18% → New Rate: 5%

Impact - Indian snacks, Indian breads, and pre-prepared culturally appropriate foods are now more affordable and more accessible.

11. Health & Well-being

• Medicinal Hydrogen Peroxide, Iodine & Medical Oxygen - Former Rate: 12% → New Rate: 5%
• Glucose Monitors & Test Strips - Former Rate: 12% → New Rate: 5%
• Thermometers & Diagnostic Apparatus - Former Rate: 18% → New Rate: 5%

Impact: Enabling affordable healthcare not just medicines, but also diagnostic and preventative care.

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12. Education & Childcare

• Feeding Bottles, Rubber Nipples - Former Rate: 12% → New Rate: 5%
• Erasers, Pencil Sharpeners - Former Rate: 5 - 12% → New Rate: Nil/5%
• Toys - wooden, metal or textile - Former Rate: 12% → New Rate: 5%

Impact: Contributing to child welfare by reducing costs of school supplies and toys.

13. House and Personal Hygiene

• Shaving Cream, After Shave, Shaving Lotion - Former Rate: 18% → New Rate: 5%
• Candles & Handmade Candles - Former Rate: 12% → New Rate: 5%
• Laundry Detergent (Starch based glues, Modified Starches) - Former Rate: 18% → New Rate: 5%

Impact: Making house cleaning products and grooming products more affordable.

14. Sustainable & Rural Goods

• Solar Cookers, Solar Water Heaters, Biogas Plants - Former Rate: 12% → New Rate: 5%
• Drip Irrigation Systems & Sprinklers - Former Rate: 12% → New Rate: 5%
• Farm Machinery (tractors, harvesters, threshers, pumps) - Former Rate: 12 - 18% → New Rate: 5%

Impact: Lowering costs for farmers and rural households promoting clean energy and better farming practices.

15. Mobility & Commuting Daily

• Bicycles & Parts - Former Rate: 12% → New Rate: 5%
• Motorcycles under 350cc - Former Rate: 28% → New Rate: 18%
• Tractors & Tractor Parts - Former Rate: 18% → New Rate: 5%

Impact: Cheaper mobility options for rural and urban poor, helping reduce transportation costs.

Wider Social and Economic Impact

• Relief to Households: A lower GST on essentials means a direct decrease in households' monthly living expenses.
• Access to Healthcare: GST free life-saving drugs and development in affordable medical goods strengthens our public health system.
• Support for Education: GST exemption on notebooks, pencils, and educational materials eases the financial burden of mid-term education provisions, especially for people from disadvantaged backgrounds.
• Rural Empowerment: The cost of tractors, irrigation systems and renewable energy promoting devices come down and therefore support lower farming costs that promote sustainable rural development.
• Nutrition and Hygiene: Affordable dairy, fruits, soaps, and toothpaste will contribute to promoting nutrition and hygiene across society as food affordability improves.

Conclusion

The GST Council's sweeping rationalization of rates is much more than an economic rationalization - it is a social intervention. The government has made a strong signal that taxation needs to be crisis responsive and welfare driven, by making producers of essential food, medicine, education and hygiene goods affordable again.

For the common man access to GST reduced goods translates to better disposable income, improved nutrition, better healthcare and improved quality of life. Over time the cumulative impact will invariably increase consumption, support local industries, and inclusive growth and marks a significant transition in the GST story for India.

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