GST 2.0: Small, Daily Use FMCG Items Like Biscuits and Shampoos to Get Bigger by Mid-November

Popular FMCG price points of ₹2, ₹5, ₹10, and ₹20 are likely to make a comeback by mid-November, following government clarifications allowing manufacturers to increase pack weights instead of reducing prices to reflect GST rate cuts.

Why Was There Confusion on Prices of Small, Daily Use FMCG Items? 

After the GST rate cuts took effect on September 22, many FMCG firms had to reduce prices of popular packs. For example:

• A ₹5 biscuit pack was repriced at ₹4.45.
• A ₹1 candy was reduced to 88 paise.
• A ₹2 shampoo sachet became ₹1.77.

These changes created inconvenience for consumers and retailers, as smaller denominations and unusual prices disrupted routine purchases and cash transactions.

Government Clarification on Prices of Small, Daily Use FMCG Items

The Central Board of Indirect Taxes and Customs (CBIC) clarified to FMCG companies that they could increase pack sizes or weights to maintain the familiar price points while passing on GST benefits. This means companies no longer have to sell products at awkward prices.

How Will GST 2.0 Impact Small, Daily Use FMCG Items?

Production of new packs at popular price points with 6–12% higher weight or volume is expected to start soon. For biscuits, pack weights will increase by 11–12%, allowing the ₹5 and ₹10 packs to return to shelves without losing value to consumers.

Other categories, such as chocolates, dairy, and beverages, may take a little longer as pack modifications are required. However, FMCG makers are preparing to reintroduce these convenient price points across products.

Impact of GST Rate Cuts on Consumers and Retailers

Restoring these price points will benefit both consumers and small retailers. Familiar prices make shopping easier and reduce the need for rounding off or providing change. Digital payments can continue to handle exact prices, but magic price points remain convenient for daily cash purchases.

Retail chains and quick commerce platforms are also expected to update product listings to reflect these new pack sizes and restored price points.

Caution from Some Companies

Some companies, particularly in the dairy segment, have indicated they will wait for formal government notifications before revising prices and increasing pack weights to ensure consumers receive intended benefits.

Read more: NPCI Launches AI-Powered “UPI Help” to Assist Users with Digital Payments.

Conclusion

The reintroduction of ₹2, ₹5, ₹10, and ₹20 price points with slightly larger pack sizes is a welcome move for both consumers and retailers. It combines convenience with compliance, ensuring that GST benefits are passed on effectively while restoring the familiarity of everyday FMCG purchases. This adjustment is expected to be widely implemented by mid-November, making shopping simpler and more predictable.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.