Consumers Set to save ₹58-₹88 Monthly Savings with GST Overhaul, Says FICCI Study

Report highlights broader tax relief on essentials, boosting disposable income for urban and rural families amid simplified slabs.

New Delhi: A recent analysis by the Federation of Indian Chambers of Commerce and Industry (FICCI), in collaboration with the Thought Arbitrage Research Institute (TARI), projects that individual consumers in India could see monthly savings ranging from ₹58 to ₹88 following the implementation of the revamped Goods and Services Tax (GST) framework, dubbed GST 2.0. These changes, effective from September 22, 2025, are expected to free up more disposable income for households, potentially spurring spending on services, retail, and local enterprises.

The findings stem from FICCI’s comprehensive report titled “Decoding the Journey of GST Reforms: GST and Its Effect on Economy, Business and Household Consumption.” The study underscores how the reforms will benefit both rural and urban demographics by expanding access to lower tax rates on everyday items. Notably, the share of exempt or merit-rated purchases for rural households is projected to rise from 56.3% to 73.5%, while urban households could see an increase from 50.5% to 66.2%.

At the core of these savings is the significant broadening of the 5% GST bracket, which now encompasses 149 categories of consumer goods—nearly triple the previous 54. This adjustment aims to make essential products more affordable, easing the financial burden on families amid ongoing economic pressures.

The reforms were finalized during the GST Council’s 56th meeting on September 3, 2025, and are being positioned as “Next-Generation GST Reforms.” Key objectives include streamlining tax slabs and slashing rates on vital goods and services to foster economic growth and consumer relief. Early indicators of the impact are already evident in the dairy sector, where leading brands have announced price cuts. For example, Mother Dairy has reduced the cost of its 1-litre ultra-high temperature (UHT) milk pack from ₹77 to ₹75, and a 500-gram butter block from ₹305 to ₹285.

Experts from FICCI emphasize that while the per-person savings may seem modest, they accumulate into meaningful household benefits, particularly for low- and middle-income groups. The report also explores broader implications, such as enhanced business efficiency and positive ripple effects on the overall economy through increased consumption.

As India continues to refine its indirect tax system, introduced in 2017, these updates mark a pivotal step toward inclusivity and simplification. Stakeholders anticipate further monitoring to assess real-world outcomes post-implementation.