GST Reforms 2025 : Daily Essentials Like Food, Clothes, and Public Transport Remain at 5% GST

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While GST 2.0 has simplified tax rates, one key slab that remains crucial is the 5% category. This is where most daily use and affordable goods fall, products that are neither essentials like milk and medicines (now tax-free) nor high-end luxury items taxed at 40%.

The government’s decision to keep this slab for affordable goods ensures that the cost of living for ordinary families remains stable.

Before and After: Daily Use Goods Under GST 2.0

What Changed for Families

The biggest relief comes in the grocery basket. Packaged foods like biscuits, cereals, and ready-to-eat products have dropped from 12% to 5%. This directly cuts household grocery bills, especially in urban families where packaged foods are regular purchases.

Basic clothing and footwear remain at 5%, which means the affordability of everyday apparel is preserved. For middle and lower-income families, this stability is important in school uniforms or daily footwear costs.

Public transport services such as metro rides and bus fares also stay at 5%. This ensures that mobility remains affordable for workers, students, and daily commuters.

Why the 5% Slab Matters

The 5% slab is where daily life meets tax policy. By keeping it low, the government ensures:

• Grocery bills are lighter.
• Affordable clothing and footwear remain within reach.
• Public transport continues to support affordable mobility.

For an average urban family, the cut on packaged foods alone can save ₹150–₹200 every month, adding up to over ₹2,000 a year, a small but meaningful relief.