GST 2.0: FMCG Sector Expects Magical Product Price Return

Do you know that Fast-Moving Consumer Goods companies (FMCG) expect prices to return to the popular magic product price soon? With the new GST 2.0 tax slabs in continuity from September 22, FMCG companies think that their “magical price points” like Rs 2, Rs 5, and Rs 10 for everyday products will be restored within the next two months.

These price points are considered crucial for middle-class and rural consumers who commonly buy small, affordable packs of biscuits, shampoo and spices.

Due to time restriction in updating packaging and factory molds, many companies temporarily reduced prices generally below these round numbers. For example, a small Parle-G biscuit pack priced at Rs 5 now costs around Rs 4.50 and a shampoo pouch priced at Rs 2 now costs Rs 1.75.

What GST 2.0 Means for FMCG Pricing?

GST 2.0 has explained the previous four tax slabs (5%, 12%, 18% and 28%) into just two slabs: 5% and 18%. Most small FMCG items have moved to the lower 5% slab, helping reduce costs for manufacturers and consumers. This move allows companies to bring back their popular price points while keeping tax benefits intact.

Must Read: GST 2.0: What Gets Cheaper Today? Full List of Price Drops

Why Magical Price Points Matter?

For many Indian shoppers, especially in smaller towns and villages, smaller price tags make buying easier, cheaper and more budget-friendly. These price points help FMCG brands maintain consistent sales volumes and build trust with consumers, who can use them in their daily household lives.

Also Read: GST Reform: Loss of Rs 95,000 Cr or Economic Growth Uplift?

What to expect from GST 2.0?

Industry experts say companies will slowly adjust pack sizes and prices by increasing quantity to reach the exact Rs 5 or Rs 10 price points again. The government's purpose behind this is to boost consumption and make daily products affordable for all.

With the festive season approaching, this is welcome news for households that have seen price rises in recent years. FMCG companies are confident that GST 2.0 will bring demand and help consumers enjoy their favourite products at affordable prices once more.