GST 2.0 Ushers in ‘Bachat Utsav’: PM Modi Hails Tax Cuts as Game-Changer for Middle-Class Wallets
As new two-slab regime slashes rates on 375 essentials from dairy to durables, companies roll out discounts amid festive buzz—experts predict Rs 2.5 lakh crore annual savings boost
New Delhi, September 22, 2025: India’s revamped Goods and Services Tax (GST) framework, dubbed GST 2.0, kicked off today with Prime Minister Narendra Modi terming it the dawn of a “GST Bachat Utsav”—a nationwide festival of savings. In a televised address to the nation on Sunday evening, just hours before the midnight rollout, Modi emphasized how the simplified two-slab system (5% and 18%) would deliver “next-generation” relief to households, MSMEs, and youth, projecting combined savings of over Rs 2.5 lakh crore annually when paired with recent income tax exemptions up to Rs 12 lakh.
The reforms, greenlit by the 56th GST Council on September 3, eliminate the 12% and 28% slabs for most goods, shifting over 375 everyday items to lower brackets and exempting key services like individual health and life insurance from the 18% levy. Effective immediately, the changes coincide with Navratri, amplifying festive spending as companies from Amul to Maruti Suzuki announce price trims to pass on full benefits, under watchful eyes from the Finance Ministry’s field officers.
Everyday Essentials Get a Festive Discount
FMCG giants wasted no time in translating tax relief into consumer gains. Dairy major Amul slashed prices on staples: a 200gm paneer packet drops 3% to Rs 92 (from 5% GST to zero), while a litre of UHT Gold milk is now Rs 80, down from Rs 83. Mother Dairy followed suit, pricing a litre of carton milk at Rs 75 (3% off) and vanilla ice cream cups at Rs 9 per 50ml, a 10% reduction after the 18%-to-5% cut on frozen treats.
Butter, cheese slices, ketchups, ghee, pickles, and jams—now at 5% GST from 12%—see 4-8% price dips across brands. Pringles chips lead the snack pack with a 12% cut to Rs 110 for 107gm, while Kellogg’s corn flakes (900gm) falls 11% to Rs 355 and Sunfeast Marie Light biscuits (1kg) drops 12%. Personal care items like shampoos, soaps, hair oils, and toothpastes shift to 5% from 18%, prompting L’Oréal, Himalaya, Close-Up, and Dove to announce 11-13% reductions.
| Category | Key Items | Old GST | New GST | Price Drop Example |
|———-|———–|———|———|——————-|
| Dairy & Snacks | Paneer (200g), Pringles (107g) | 5-18% | 0-5% | Rs 92 (3%), Rs 110 (12%) |
| Frozen Treats | Ice Cream (50ml) | 18% | 5% | Rs 9 (10%) |
| Personal Care | Shampoo, Soap | 18% | 5% | 11-13% |
| Cereals | Corn Flakes (900g) | 18% | 5% | Rs 355 (11%) |
### Big-Ticket Boost: From Cement to Cars
Construction gets a lift with cement’s GST trimmed to 18% from 28%, promising 10% cheaper bags from UltraTech to JK Cement—vital for the sector’s MSME ecosystem. Insurance premiums for health and life policies could fall 15%, exempt from 18% tax, easing family budgets amid rising medical costs.
Durable goods shine brighter: Whirlpool’s 1-tonne ACs are Rs 4,509-5,259 cheaper, and dishwashers drop Rs 3,282-4,336 post-18% slab shift. Automakers like Maruti Suzuki pass on full cuts, reducing prices Rs 46,400 to Rs 1.29 lakh across models—small cars now at 18% (from 28% plus cess), bigger ones at 40% (down from up to 50%). However, dealers face Rs 2,500 crore in potential losses on pre-cut inventory, leading to aggressive discounts on older stock.
Health and wellness see exemptions: Gyms, salons, yoga classes, and plant-based milks drop to 5% from 18%, while man-made fibres and yarns aid textile exports. Lithium-ion batteries unify at 18%.
Economic Ripple: Revival and Self-Reliance
Economists at Bank of Baroda forecast a “big push” for consumption, curbing inflation and channeling savings into investments, especially in reviving segments. Modi tied the reforms to Atmanirbhar Bharat, urging a Swadeshi shift to empower local MSMEs and states, while the BJP launches a week-long Bachat Utsav campaign till September 29.
Challenges linger for small firms with input tax credit transitions, but early signals are upbeat as ads flood airwaves. On X, users buzz with lists of cheaper items, from paneer to Pringles, hailing the “Diwali early” vibe. As Navratri garba echoes, GST 2.0 positions India for equitable growth, one slab at a time.
