FMCG Sector Gains As Daily Essentials Move To 5% GST Slab

(MENAFN- KNN India) New Delhi, Sep 4 (KNN) The Fast-Moving Consumer Goods (FMCG) sector is set to benefit after the Goods and Services Tax (GST) Council approved lowering the tax rate on several essential items to 5%.

The change, effective from September 22, 2025, is expected to reduce prices and encourage consumption, especially among rural and semi-urban households.

Items such as soaps, toothbrushes, hair oil, namkeen, instant noodles, chocolates, and instant coffee will now attract a 5% GST. Additionally, bread, paneer, and ultra-high temperature (UHT) processed milk have been exempted from GST, making them more affordable for consumers.

Finance Minister Nirmala Sitharaman highlighted that the move is aimed at enhancing accessibility to essential goods and providing relief to households.

Industry leaders have welcomed the decision. Devendra Shah, Chairman of Parag Milk Foods, said that the lower tax burden would make dairy products more accessible, potentially boosting consumption and benefiting farmers with more stable incomes.

Rishabh Jain, CFO of Bikaji Foods International, mentioned that the company is assessing the impact of these reforms on input and output taxes and plans to adjust prices accordingly.

The All India Consumer Products Distributors Federation (AICPDF), representing over 450,000 distributors and 13 million kirana retailers, praised the GST rationalisation. The federation expects the change to lower prices, improve affordability, and increase consumption, benefiting households nationwide.

They also thanked the finance minister for addressing sector concerns and supporting smoother inventory management for traders.

Overall, the GST revision is expected to drive growth in the FMCG sector by 2–3 percentage points, strengthening the supply chain from manufacturers to retailers and enhancing overall market efficiency.

(KNN Bureau)

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