New GST for FMCG Products: Tax Overview for Fast-Moving Consumer Goods
- FMCG products now largely fall under 5% and 18% GST slabs, with a special 40% rate for specified demerit goods such as aerated beverages.
- Essentials like fresh milk and unpackaged flour remain exempt, while products such as hair oil, shampoo, soap, toothbrushes and toothpaste now attract 5% GST.
- Many packaged foods including namkeen, pasta, noodles, chocolates, coffee, cornflakes, butter and ghee now attract 5% GST.
- The revised rates aim to simplify taxation, reduce cascading and improve affordability and compliance across the FMCG sector.
- GST registration is generally required for FMCG businesses crossing the applicable turnover threshold, while eligible small traders may opt for simplified schemes.
FMCG—Fast-Moving Consumer Goods—include essential items like toothpaste, soap, snacks, soft drinks, packaged foods, and detergents. These products are bought frequently and in large quantities across households in India. But what does GST mean for the FMCG industry?
In this blog, we simplify the GST for FMCG products, exploring current tax rates and the broader impact of GST on FMCG distributors and sector growth.
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New GST Rate on FMCG Products in India
Effective from 22 Sep 2025, India’s GST schedule for FMCG products rationalises several tax slabs. Many items formerly taxed at 12% or 18% have moved to 5%, while specified demerit goods attract a special 40% rate. Exemptions for certain essential goods continue.
FMCG Slabs – At a Glance
| Category | Examples | New GST Rate |
|---|---|---|
| Essential items | Loose flour, pulses, fresh milk | Nil, as applicable |
| Pre-packaged staples and dairy products | Rice/wheat flour, ghee | 5% |
| Toiletries and cleaning items | Toothpaste, toilet soap, shampoo, detergents | 5% or 18%, depending on product |
| Snacks & ready-to-eat foods | Namkeen, chips, biscuits, noodles | Generally 5% |
| Chocolates & cocoa products | Bars, pralines, cocoa-based confectionery | 5% |
| Soft drinks (aerated/energy drinks) | Aerated beverages, energy/cola drinks | 40% |
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Note: The 12% slab has largely been rationalised, with many items shifting to 5%. Specified demerit goods such as certain aerated beverages attract the special 40% rate.
New GST Rate Examples for Common FMCG Items
| FMCG Product | New GST Rate |
|---|---|
| UHT milk | Nil |
| Pre-packaged and labelled curd | 5% |
| Biscuits | 5% |
| Toilet soap and shampoo | 5% |
| Detergent powder / liquid | 18% |
| Ready-to-cook noodles | 5% |
| Aerated drinks | 40% |
| Pre-packaged and labelled paneer | Nil |
| Cheese | 5% |
| Toothpaste | 5% |
| Deodorant | 18% |
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Classify products according to their HSN and product description. Packaging affects the GST treatment of some goods, while specified aerated beverages attract the special 40% rate.
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Old GST Slabs for FMCG Products in India
(Old GST Rates – Applicable Until 21st September 2025)
FMCG products fell under different GST slabs of 0%, 5%, 12%, 18% and 28%, depending on product classification and packaging or labelling conditions.
| Category | Examples | GST Rate |
|---|---|---|
| Essential items | Fresh milk; flour, pulses and curd where exempt conditions applied | Nil |
| Pre-packaged staples | Rice, wheat flour, pulses | 5% |
| Dairy products | Ghee | 12% |
| Toiletries and cleaning items | Toothpaste, toilet soap, shampoo, detergents | 18% |
| Snacks & ready-to-eat foods | Packaged namkeen | 12% |
| Biscuits and instant noodles | Biscuits, noodles | 18% |
| Chocolates | Chocolate and cocoa-based confectionery | 18% |
| Aerated and energy drinks | Aerated drinks, caffeinated/energy drinks | 28% |
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Old GST Rate Examples for Common FMCG Items
| FMCG Product | GST Rate |
|---|---|
| UHT milk | 5% |
| Pre-packaged and labelled curd | 5% |
| Biscuits | 18% |
| Toilet soap and shampoo | 18% |
| Detergent powder / liquid | 18% |
| Ready-to-cook noodles | 12% |
| Aerated drinks | 28% |
| Pre-packaged and labelled paneer | 5% |
| Cheese | 12% |
| Toothpaste | 18% |
| Deodorant | 18% |
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Classify products precisely by HSN and product description, as packaging and product classification can affect the applicable GST rate.
Current GST Rates for Common FMCG Products
| FMCG Product | GST Rate |
|---|---|
| UHT milk | Nil |
| Pre-packaged and labelled curd | 5% |
| Biscuits | 5% |
| Toilet soap and shampoo | 5% |
| Detergent powder / liquid | 18% |
| Ready-to-cook noodles | 5% |
| Aerated drinks | 40% |
| Pre-packaged and labelled paneer | Nil |
| Cheese | 5% |
| Toothpaste | 5% |
| Deodorant | 18% |
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These GST rates apply based on the classification of the product and are not different for manufacturers, distributors, or retailers.
GST Impact on FMCG Sector: Key Takeaways
- Simplified tax structure – All goods are now under a unified GST regime
- ITC availability – Distributors, wholesalers, and retailers can claim credit on inputs
- Wider reach – Reduced tax cascading has improved the affordability of FMCG goods
- Better compliance – E-way bills and e-invoicing ensure transparency in supply chains
- Competitive pricing – Elimination of multiple tax layers has reduced pricing distortions
Whether you’re a distributor, retailer, or manufacturer, understanding GST for FMCG products is key to better pricing, improved profitability, and smooth operations. The Goods and Services Tax (GST) regime has simplified taxation, brought uniformity, and made India’s vast FMCG market more accessible and organized.
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