Major FMCG companies have passed on the rate cut benefits, promising consumers lighter bills and a boost in everyday affordability
With the Goods and Services Tax (GST) rate cuts now officially becoming effective, fast-moving consumer goods (FMCG) majors from soaps to staples have slashed prices across categories. Companies like Hindustan Unilever (HUL), Procter & Gamble (P&G) India, Parle, ITC, Mother Dairy, Baskin Robbins have passed on the rate cut benefits, promising consumers lighter bills and a boost in everyday affordability.
As per the revised MRP list shared by P&G India, Vicks Action 500 Advance and Vicks Inhaler now retail at Rs 64, down from Rs 69. In its shampoo portfolio, including Head & Shoulders and Pantene, the company has also slashed prices. From Mother Dairy, key products such as UHT milk, paneer, ghee, butter, cheese and milkshakes are now cheaper under the revised GST slabs. A one-litre UHT milk pack now costs Rs 75 against Rs 77 earlier, while 500 gram of butter has dropped from Rs 305 to Rs 285.
“Communication has already been shared with our over 7,000 distributors, and 100 per cent of our SKUs are now aligned with the revised MRPs reflecting price cuts. While some products will see a direct price reduction, others will witness grammage increases as packaging transitions take place,” Mayank Shah, Vice President, Parle Products told BW Businessworld.
Passing On The Benefits
Industry reports noted that nearly 400 items have been shifted from the 12 per cent and 18 per cent tax slabs to the 5 per cent tax slab. Emphasising that the new GST rates will benefit 11 of the top 30 consumption items and a third of an average consumer’s monthly expenditure, a report has highlighted that the extent of spur from GST cuts hinges on passthrough.
Crisil noted that these 11 items include essentials (milk products), discretionary products (automobiles, beauty services) and goods seeing a surge in demand over the past few years (processed food).
“We have already announced that we will pass on the benefits of rate rationalisation to consumers including price cuts across our food categories effective from 22nd September. We are also informing all our trade partners about the ensuing changes. During the transition period, physical products bearing both the old and new MRPs may be available in the market. Consumers should refer to the updated MRP before making any purchase,” explained Hemant Malik, Executive Director, ITC.
Baskin Robbins stated that while printed MRPs on some products may reflect older GST rates, customers will be charged lower prices as per the laminated price lists. Re-stickering has not been undertaken to avoid product quality risks from thermal shock. On a broader scale, the industry is expecting greater rural penetration as affordability improves, faster adoption of digital-first consumption models. An acceleration of wellness-focused choices is also on the cards, as families prioritise nutrition, preventive health, and self-care.
“This significant rate cut will put more money in the hands of consumers, making frozen foods more affordable and a regular part of their consumption basket. We expect this to boost overall demand, providing a strong fillip not just to our business but the entire agricultural value chain that powers our business,” highlighted Haresh Karamchandani, MD, and Group CEO of HyFun Foods.
Lighter Labels Take Effect
In a bid to ease regulatory burden on industry following GST rate cuts, the government has made re-stickering of product packaging optional, rather than mandatory. The Department of Consumer Affairs issued a revised advisory after revised GST rates came into effect on that date.
As per the advisory, manufacturers, packers and importers may voluntarily affix additional revised price stickers on unsold packages manufactured before 22 September 2025, provided that the original MRP printed on the package is not obscured. The move ensures companies are not forced into immediate re-labelling, alleviating logistical and cost pressures. Industry observers have welcomed the change, saying it offers relief to manufacturers coping with multiple supply chain and compliance costs.
“Urban consumers, who represent 30 per cent of the population but account for nearly 70 per cent of packaged goods consumption, will particularly feel this positive impact. Yet the broader impact lies in how this policy could reshape demand patterns over the next 12 to 18 months. This simplification of the tax structure also enhances the ease of doing business, benefiting both domestic enterprises and international entities looking to expand in India,” Tarun Arora, Chief Executive Officer (CEO) and Wholetime Director of Zydus Wellness.
On the MRP revision front, the advisory also permits use of old packaging material or wrappers printed before the GST revision, up to 31 March 2026 or until such stock is exhausted, whichever is earlier. Consumers are expected to benefit also, as the government hopes that cost savings from an eased compliance burden will be passed on in pricing rather than added costs being passed back to buyers.
GST Grievance Mechanism
Aimed at addressing the expected consumer queries and complaints following the implementation of revised GST charges, rates and exemptions, the Centre has enabled GST grievance redressal on National Consumer Helpline (NCH). A dedicated category has been enabled on the Integrated Grievance Redressal Mechanism (Ingram) portal. This category features major sub-categories including automobiles, banking, consumer durables, ecommerce, fast-moving consumer goods (FMCG) and others wherein GST related complaints will be registered.
The helpline will also share data and insights generated from consumer complaints under this sector with concerned companies, CBIC and other concerned authorities to enable timely action under relevant laws. This initiative is expected to strengthen GST compliance and promote a participatory governance model by empowering consumers to become active stakeholders in fair market practices.
As the reforms are expected to stimulate private consumption and ease inflationary pressure, a report by CareEdge Ratings has stated that GST rationalisation could lower consumer price index inflation by 70 to 90 basis points annually under the current CPI basket, assuming the pass-through to consumers.
With the festive season around the corner, softer price tags are set to lift consumer sentiment and fuel demand across categories. For companies, it marks both a compliance relief and a growth catalyst. On the other hand, it promises a festive boost to affordability and choice for households.
