GST 2.0 drives festive car sales, but food and medicine price cuts remain elusive: Survey

The survey, conducted between October 6 and October 13, received over 79,000 responses

Automobile sales recorded a sharp rise during the Navratri period, buoyed by the Goods and Services Tax (GST) 2.0 rate cuts that came into effect on September 22. According to data cited in a consumer survey by LocalCircles, passenger vehicle sales rose 35 percent year-on-year during the nine-day Navratri period (September 22–October 1), concluding with Dusshera on October 2.

The survey found that 52 percent of consumers who purchased vehicles between October 6 and October 13 confirmed receiving the full benefit of the GST rate reduction, while another 24 percent said they received partial benefit. In total, 75 percent of respondents reported receiving full or partial benefits, indicating strong transmission in the automobile sector. Those indicating no benefit rose from 12 percent in week two to 17 percent in week three.

The survey, conducted between October 6 and October 13, received over 79,000 responses from consumers located in 347 districts across India. Of these, 69 percent were men and 31 percent women; 44 percent respondents were from tier 1 cities, 29 percent from tier 2, and 27 percent from tier 3, 4, 5 and rural districts.

The survey tracks consumer experiences across three weeks following the GST 2.0 rollout on September 22, 2025, to capture how quickly tax benefits are reaching end users. While initial government enforcement ensured faster pass-through in the first week, subsequent weeks indicate whether retailers and brands are maintaining compliance.

“While more consumers are getting the benefits of GST 2.0 reforms, in some sectors like processed foods and medicines much more action is required by the brands, their supply chain and the last mile retailers,” the survey observed.

While the initial weeks saw swift transmission in some sectors due to government enforcement, the third week’s data suggests momentum is slipping in essential goods segments, indicating the need for continued oversight.

White goods

The pass-through of GST rate cuts has been relatively steady in appliances, white goods and consumer electronics. Two in three consumers surveyed in week three confirmed receiving full or partial benefits, up from 57 percent in week two. The survey noted that 33 percent of consumers reported receiving the full benefit of lower tax, while 32 percent received partial benefits.

The proportion of consumers reporting no benefit has steadily fallen – from 33 percent in week one to 20 percent in week two, and further to 14 percent in week three – indicating improved pricing compliance among retailers in this segment.

Food and medicine

In contrast, the transmission of GST benefits in packaged foods and medicines has faltered after an initial surge. The survey found that 22 percent of consumers received full benefit of the tax cut on packaged foods, while 32 percent received partial benefit. This represents a 50 percent drop in those receiving full benefit compared to week two, when 40 percent had reported price relief. The total number of consumers receiving either full or partial benefit also fell to 54 percent in week three, from 58 percent earlier.

The LocalCircles survey attributed the decline to reduced enforcement, after government action in the initial weeks had led to products with revised maximum retail prices reaching retailers.

In the case of medicines, 27 percent of consumers surveyed confirmed receiving full benefit, and another 27 percent received partial benefit. The share of those reporting any benefit dropped from 60 percent in week two to 54 percent in week three, while the proportion reporting no benefit increased from 28 percent to 35 percent. The survey noted that the medicines sector continues to be the worst performing in passing on GST 2.0 benefits.