6 weeks of GST 2.0: Over 4 in 10 consumers surveyed confirm getting no benefit of GST rate reduction on packaged foods and medicines; Situation better on vehicles, white goods & electronics

November 5, 2025, New Delhi: One and a half months after Goods and Services Tax (GST) rates of around 80 goods and services were lowered many consumers are still waiting to receive full benefits. While policy changes have been enacted on paper, the actual downward translation into shelf-prices and invoices remains patchy. For many everyday goods (FMCG, medicines), the tax reduction hasn't yet been fully translated into savings for the buyer. Only certain categories — like vehicles — are showing near-full pass-through.

Looking at some of the comments or observations on social media, consumers appear far from satisfied with the implementation at the market level. In the case of medicines, many drugs were shifted from higher tax slabs (12 %/18 %) to 5 %, and certain life-saving drugs to 0%. The National Pharmaceutical Pricing Authority (NPPA) had issued orders that manufacturers/marketers must reflect the reduced GST rate (i.e., revise the MRP or issue supplementary price lists) and ensure the benefit is passed to the consumer. LocalCircles’ study in the third week post GST 2.0 was introduced found that over 45% of medicine buyers saw no reduction in final prices even after the GST cut. All India Organisation of Chemists and Druggists (AIOCD), the national chemists’ body, is reported to have stated that small chemists/distributors are facing losses because they bought stock under old (higher) GST rates and now must sell at lower tax rates — yet they cannot claim input tax credit (ITC) as they are unregistered or on composition scheme. They argue this constrains their ability to reduce MRP accordingly. Specifically, they have requested a transition period of 3 months to clear old stock at old MRP without penalty.

Ahead of the government announcement of the new GST rates, several fast-moving consumer goods (FMCG) companies, especially top rung companies, were reported to have been under pressure as buying from distributors took a hit while the trade slowed down their purchases during July-September quarter in anticipation of new stock with updated maximum retail prices (MRP).

The slow pass through of benefits to consumers in part is reported to have been due to retailers’ reluctance to sell at lower prices without the brands or manufacturers agreeing to make up for their losses. Thus, while GST 2.0 has laid the groundwork for relief and higher purchasing power — but for a significant portion of consumers, it appears the benefits remain aspirational until last-mile pricing and distribution line-ups catch up.

Given the consumer experience in the first three weeks, LocalCircles has conducted a new survey in the sixth week after GST 2.0 rates came into effect to find out whether brands and other manufacturers are ensuring that the key sectors are indeed passing on the benefits of the lower GST rate to consumers. The survey received over 53,000 responses from consumers located in 342 districts of India. 63% respondents were men while 37% respondents were women. 41% of respondents were from tier 1, 29% from tier 2 and 30% of respondents were from tier 3, 4, 5 & rural districts.

6 weeks post GST 2.0: Only 13% consumers surveyed confirmed receiving full benefit of GST rate reduction on packaged food products; Another 33% confirmed receiving partial benefit; 42% explicitly stated no benefit received

Focusing first on packaged food products, the survey asked consumers, “GST rate on many packaged food items was reduced from 18% and 12% to 5% from Sep 22, 2025. Over 5-6 weeks post that, what has been your experience in regard to getting the benefits of lower GST on packaged food items?” Out of 16,043 consumers who responded to the question 13% indicated that “full benefit of lower tax is being passed on”; 33% of respondents indicated that “only partial benefit of lower tax is being passed”; 41% of respondents however indicated that “no benefit of lower tax is being passed” and 13% of respondents did not give a clear answer. To sum up, only 13% of consumers surveyed confirmed receiving full benefit of GST rate reduction on packaged food products; Another 33% confirmed receiving partial benefit; 42% explicitly stated no benefit received.

6 weeks post GST 2.0: Only 21% consumers surveyed confirmed receiving full benefit of GST rate reduction on medicines; Another 30% confirmed receiving partial benefit; 49% explicitly stated no benefit received

Focusing on medicines, the survey next asked the consumers, “GST rate on many medicines was reduced from 18% and 12% to 5% from Sep 22, 2025. Over 5-6 weeks post that, what has been your experience with regards to getting the benefit of lower GST on medicines?” Out of 15,907 consumers who responded to the question 21% indicated that “full benefit of lower tax is being passed”; 30% of respondents indicated that “only partial benefit of lower tax is being passed”; and 49% of respondents indicated that “no benefit of lower tax is being passed”. To sum up, only 21% of consumers surveyed confirmed receiving full benefit of GST rate reduction on medicines; Another 30% confirmed receiving partial benefit; 49% explicitly stated no benefit received.

6 weeks post GST 2.0: 33% consumers surveyed confirmed receiving full benefit of GST rate reduction on appliances, white goods and consumer electronics; Another 33% confirmed receiving partial benefit; 28% explicitly stated no benefit received

Focusing on appliances, white goods and consumer electronics, the survey asked consumers, “GST rate on many appliances, white goods and consumer electronics was reduced from 28% to 18% from Sep 22, 2025. Over 5-6 weeks post that, what has been your experience with regards to getting the benefit of lower GST on such items?” Out of 17,095 consumers who responded to the question 33% indicated that “full benefit of lower GST is being passed”; 33% of respondents indicated that “only partial benefit of lower tax is being passed”; 28% of respondents indicated that “no benefit of lower tax is being passed” and 6% of respondents did not give a clear answer. To sum up, 33% of consumers surveyed confirmed receiving full benefit of GST rate reduction on appliances, white goods and consumer electronics; Another 33% confirmed receiving partial benefit; 28% explicitly stated no benefit have been received.

6 weeks post GST 2.0: 47% consumers surveyed confirmed receiving full benefit of GST rate reduction on vehicles; Another 34% confirmed receiving partial benefit; 14% explicitly stated no benefit received

With GST 2.0 rollout and festive month, vehicle sales in October touched new highs. Approximately 4.7 lakh passenger vehicles were sold during the month. EV sales also surged past the two-lakh mark reflecting an 11% month over month increase after two months of decline. To understand if vehicle buyers have received the benefits of GST 2.0, the survey asked consumers, “GST rate on vehicles was reduced by 10% across most categories from Sep 22, 2025. Over 5-6 weeks post that, what has been your experience with regards to getting the benefit of lower GST on vehicles?” Out of 16,406 consumers who responded to the question 47% indicated that “full benefit of lower tax is being passed”; 34% of respondents indicated that “only partial benefit of lower tax is being passed”; 14% of respondents indicated that “no benefit of lower tax is being passed”; and 5% of respondents did not give a clear answer. To sum up, 47% of consumers surveyed confirmed receiving full benefit of GST rate reduction on vehicles; Another 34% confirmed receiving partial benefit; 14% explicitly stated no benefit received.

In summary, six weeks post GST 2.0 implementation from Sep 22, 2025, consumers are still waiting for benefits of lower tax rate in key sectors like packaged foods and medicines to fully reach them. In the case of packaged food products, only 13% of consumers surveyed confirmed receiving full benefit of GST rate reduction; Another 33% confirmed receiving partial benefit; 42% explicitly stated that they have received no benefit. On medicines, only 21% of consumers surveyed confirmed receiving full benefit of GST rate reduction; Another 30% confirmed receiving partial benefit; 49% explicitly stated no benefit has been received. In the case of appliances, white goods and consumer electronics, most of which are expensive products bought after great deliberation, 33% consumers surveyed confirmed receiving full benefit of GST rate reduction; Another 33% confirmed receiving partial benefit; 28% explicitly stated that they had not received any benefit. Automobile was the top sector where GST rate reduction benefits best reached consumers where 47% buyers received full benefit and 34% confirmed receiving partial benefit. Only14% of those who bought a vehicle post GST 2.0 and surveyed explicitly stated that they had received no benefit of tax reduction during purchase of their new vehicle.

The study reveals the gap between what should happen versus what is happening on the ground in regard to GST benefits reaching consumers. The key issue being retailers of packaged food and medicines selling their old stocks at old and higher prices instead of the new GST rates. The manufacturers or brands and their supply chain entities like distributors and stockists, according to retailers haven’t provided much support till date to absorb part of the losses they would incur if they were to sell old stock at revised prices. As a result, many Indian consumers are yet to fully experience the benefits of GST 2.0.