Ahead of the upcoming 56th GST Council meeting in late June–early July 2025, the government is preparing to rationalize GST slabs, including lowering the rate on everyday essentials like toothpaste and soap, currently taxed at 18%—a move aimed at reducing costs for consumers and simplifying the tax structure
1. 📉 From 18% GST to Likely 12% or 5%
Experts suggest that several items now in the 18% bracket—such as toothpaste and soap—could be shifted down to the 12% slab, or even 5%, under the rationalization plan. These changes aim to reduce the number of slabs from four to three (0%, 5%, 18%)
2. 🛁 Everyday Goods to Get Cheaper
ClearTax confirms that currently, toothpaste and soap are taxed at 18%. A cut to 12% or 5% would directly reduce retail prices, offering immediate relief on household staples.
3. 🧾 Simplifying the GST Structure
The decision is part of a broader overhaul—merging the 12% slab into lower or higher brackets to simplify compliance. The move is revenue-neutral and is expected to reduce classification disputes while aligning India’s GST with global best practices
4. 💵 Consumer Savings & Economic Impact
Lower-priced essentials mean improved affordability for middle and lower-income households. Reduced GST on daily-use items can spur consumption, helping boost GDP growth by increasing demand.
5. ⚖️ Balanced Impact on Revenue & Industry
Tax analysts caution that shifting items downward may impact manufacturers who claim input tax credits. Thus, any changes will be carefully calibrated to maintain the revenue-neutral status of the shift
✅ Should You Expect Price Drops Soon?
- The 56th GST Council meeting—expected in late June or early July—will finalize the rate changes
- Once approved, reduced GST on toothpaste, soap, and similar essentials will likely take effect in FY 2025–26, and could lower your bills by 5–6% on these items.
Final Take
With the government poised to lower GST on essentials like toothpaste & soap, consumers can look forward to tangible savings and a leaner tax system. This reform is a win–win: simpler taxation, fewer disputes, and more purchasing power at home.
