You are here: Home » Economy & Policy » News » GST
Business Standard

GST: Food expenses likely to go up marginally

While essential items may remain unchanged or see a decline, packaged goods may see a rise in price


Priya Nair  |  Mumbai 


Households should be prepared for a slight increase in monthly budget from July 1 when the new rates will apply. But, under GST, prices will be uniform across the country, which will make it more transparent for consumers.

The budget for food is likely to be impacted marginally on the adverse side, if you are a big consumer of packaged goods. Many essential items of daily use such as vegetable oil, tea, coffee and cereals are likely to see a significant decline. Similarly, juices and ice cream could also see a marginal fall in price. However, sugar, condiments, ghee and cold drinks could see a rise. Similarly, prices of packaged goods may go up because the excise tax is lower now, while under most of them are in the 18-22 per cent range, said Sarika Goel, tax partner, EY India.

“In case of food products, broadly there could be a marginal increase from the current 25-26 per cent (eight per cent excise plus VAT of 13-15 per cent) to 28 per cent. But milk, grains and cereals have been exempt, so there will be no change in these or there will be a decrease,” she said.

Toiletries such as toothbrushes, shampoos, soaps, detergents, perfumes, body creams etc. could see an increase in prices after “The challenge for a lot of these fast moving consumer goods is that many of them are manufactured in places like Uttarakhand where the government gives exemption on excise duty. It is yet to be seen how this will impact prices. But broadly there could be a marginal increase in cosmetics of two-four per cent from the rate perspective, assuming no other change in costing,” Goel said.

While there will be no change in school or college fees as education continues to be exempt, books and coaching classes could get more expensive. As telecom services fall in the 18 per cent range under GST, consumers must be prepared for higher telephone bills and internet bills. Clothes for your family may also get more expensive as branded apparel prices could see a rise. Medicines will remain unchanged as there is no change in the tax, while cooking gas may see a fall in price.


Note: All the negative figures imply rise in your household budget Products such as salt, milk, vegetables have been left out as there is no impact on them. Source: EY


Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, May 20 2017. 02:53 IST