Milk to medicines: GST cut could save your family over ₹15,000 a year

From groceries and toiletries to life-saving drugs, new rates of consumption tax will help household budgets

Tax revisions announced by the GST council will make scores of essential items cheaper, helping millions of families.

 

The council agreed to two rates of 5 per cent and 18 per cent against an existing four-tiered tax structure, according to an official statement. The new goods and services tax rates will come into effect from September 22, except for cigarettes, chewing tobacco and pan masala.

 

Daily use items that will become cheaper

Households will see savings on a wide range of common products after GST cuts. Some everyday items that will attract lower or zero GST include:

 

• UHT milk new rate – 5 per cent to nil 
• Paneer and all packaged Indian breads – 5 per cent to nil 
• Hair oil, toilet soap bars, shampoos, toothbrushes, toothpaste – 18 per cent/12 per cent to 5 per cent 
• Bicycles, kitchenware, tableware, household articles – 18 per cent/12 per cent to 5 per cent 
• Packaged namkeens, bhujia, sauces, pasta, instant noodles, chocolates, coffee, butter, ghee, cornflakes – 12 per cent, 18 per cent to 5 per cent

 

Rate cuts also cover medical goods such as bandages, diagnostic kits and glucometers, besides life-saving drugs that are now tax free. 

 

Big ticket purchases

 

Big-ticket purchases such as small cars (below 1200cc, 4000mm), motorcycles (below 350cc), TVs up to 32 inches, dishwashers and air-conditioners, will attract 18 per cent GST, down from 28 per cent.

 

A monthly basket: How the maths adds up

 

To see the impact, let’s take a typical middle-class household with a monthly spend of about Rs 15,000 on essentials. Here’s how GST cuts change the picture:

 

Dairy and staples

 

• 30 litres UHT milk: Rs 1,800 (saving Rs 90) 
• 4 kg paneer: Rs 1,600 (saving Rs 80) 
• 10 packs packaged bread/paratha: Rs 400 (saving Rs 20)

 

Cooking & breakfast items

 

• 3 kg butter + 2 litres ghee: Rs 2,500 (saving Rs 125) 
• 2 kg cornflakes + 500 g coffee + 500 g chocolates: Rs 1,800 (saving Rs 225) 
• 10 packs instant noodles/pasta/sauces: Rs 500 (saving Rs 50)

 

Snacks

• 5 kg namkeens/bhujia: Rs 1,200 (saving Rs 120)

 

Toiletries & personal care

 

• Soaps, shampoos, toothpaste, toothbrushes, hair oil (for family of 4): Rs 2,500 (saving Rs 325)

 

Kitchenware & household articles

• Small household/kitchen purchases (steel/utensils, containers): Rs 1,500 (saving Rs 150)

 

Medicines & healthcare

• Monthly supply of general medicines, bandages, test strips: Rs 1,500 (saving Rs 150)

 

Miscellaneous groceries

• Sauces, condiments, preserved foods: Rs 1,200 (saving Rs 120)

 

Total spend: Rs 15,000

 

Total savings after GST cut on the above bucket: Rs 1,300–1,400 per month

 

That is nearly 9 per cent relief on household tax burden, translating into an annual saving of Rs 15,000–17,000, enough to cover school fees for a term, a health insurance premium, or a festival shopping budget.