GST Overhaul to Save Consumers ₹58–₹88 Per Month: FICCI Report

Indian consumers are set to benefit from modest savings following the latest Goods and Services Tax (GST) overhaul, which takes effect on September 22, 2025. According to a study by FICCI and the Thought Arbitrage Research Institute (TARI), households may save between ₹58 and ₹88 per person each month, leaving them with a slight rise in disposable income.

Expansion of the 5% GST Slab

The key relief comes from the expansion of the lowest 5% GST slab. Previously covering 54 consumer goods categories, it will now apply to 149 categories. This expansion will directly reduce the tax burden on several essential goods, ensuring lower retail prices for both rural and urban consumers.

Relief for Rural and Urban Households

The report, Decoding the Journey of GST Reforms: GST and Its Effect on Economy, Business and Household Consumption, highlights that the reforms provide meaningful relief across demographics. For rural households, the share of exempt or merit-rated purchases has risen from 56.3% to 73.5%. In urban households, this share has increased from 50.5% to 66.2%, indicating a broad-based impact.

GST Council’s 56th Meeting Decisions

The changes stem from the GST Council’s 56th meeting, held on September 3, 2025. The decisions taken during this meeting have been termed the “Next-Generation GST Reforms” and focus on simplifying tax slabs while lowering rates on essential goods and services.

Early Signs of Price Cuts

Consumers are already beginning to see tangible benefits. Leading dairy brand Mother Dairy has announced price revisions, with its 1-litre UHT milk now retailing at ₹75 instead of ₹77, while the price of 500 grams of butter has dropped from ₹305 to ₹285. Such changes indicate how households will soon experience direct savings from the reforms.

Read More: Heritage Foods Reduces Dairy Prices Ahead of Festivals, Passing GST Benefits to Consumers

Conclusion

The GST overhaul represents a significant shift in India’s indirect tax framework, designed to ease the burden on households while supporting consumption-driven growth. Although the monthly savings per person are modest, they reflect a broader effort to simplify the tax regime and boost household purchasing power across both rural and urban India.

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