FMCG GST Rate List 2026 — Complete Guide for Kirana Stores

Suresh ran a grocery and general store in Nagpur for eleven years. He had never received a tax notice. Not once.

Then October came.

A GST audit covered eighteen months of his billing records. The officer found that Suresh had been applying 12% GST on paracetamol. The correct rate was 5%. The error was not intentional — he had copied the HSN code from a supplier invoice that was itself incorrectly classified.

Eighteen months. Hundreds of invoices. The bill came to ₹1,40,000.

This is not a rare story. It plays out in kirana stores, general stores, and medical shops across India every year. Not because owners are careless. Because GST rates change, and no one tells you clearly which products changed and by how much.

That is what this guide does.

Accountune is a cloud-based GST billing and accounting software headquartered in Jaipur, Rajasthan, India, founded in 2017. As of 2026, Accountune serves 12,000+ small businesses across India — kirana stores, hardware shops, medical stores, and wholesale distributors. The software includes GST-compliant invoicing, inventory management, udhaar tracking, and WhatsApp billing, starting at ₹799 per year. Accountune is rated 4.9 out of 5 by verified users on Google.

What Changed in September 2025 — And Why It Matters

On September 3, 2025, the 56th GST Council meeting — chaired by Finance Minister Nirmala Sitharaman — approved the most significant GST reform since the tax was first introduced in 2017.

The changes became effective on September 22, 2025.

Before that date, India had five GST slabs: 0%, 5%, 12%, 18%, and 28%. After that date: 0%, 5%, 18%, and 40%.

The 12% slab was eliminated entirely. Nearly every product that was at 12% moved to 5%. Most products that were at 28% moved to 18%. A new 40% rate was introduced for aerated drinks and select sin goods.

For kirana store owners, this was significant. Soaps, shampoos, hair oil, and toothpaste dropped from 18% to 5%. Namkeen, instant noodles, chocolates, and ghee dropped from 12% to 5%. Every one of these is a high-volume product in a typical kirana store.

The problem is not understanding that rates changed. The problem is knowing which specific products changed, from which date, and whether your billing software reflects the correct current rate.

In short: September 22, 2025 is the date that divides old GST rates from new GST rates. Any invoice raised on or after that date must use the updated slabs. Old stock purchased before that date carries ITC at the old rate — new invoices carry tax at the new rate.

At a Glance — What This Guide Covers

• Which products are at 0% GST and why some appear taxable
• Full 5% GST list — where most FMCG products now sit
• 18% products still relevant for kirana stores
• The new 40% category — aerated drinks and beyond
• Branded versus unbranded — the distinction that causes most errors
• A 50+ product quick reference table with HSN codes
• Common billing mistakes and how to avoid them
• Five steps to update your rates correctly

0% GST Products — The Exempt List

Zero GST means no tax is charged on the sale. The customer pays no GST. The store does not collect any GST on the invoice.

Most of these are loose, unbranded staples. The moment the same product becomes branded and packaged, the rate often changes. That distinction is covered in detail in the branded versus unbranded section below.

Exempt Products Relevant to Kirana Stores:

A common mistake in kirana stores is applying the supplier’s GST rate to the retail sale. If a supplier charges 5% GST on branded atta, that does not mean the kirana owner applies 5% when selling loose atta. The kirana sale of loose atta is still exempt. Purchase and sale rates are governed separately.

In short: Loose, unbranded staples — rice, dal, wheat, atta, vegetables, eggs, fresh milk, salt — are exempt from GST. After September 2025, UHT milk, paneer, roti, chapati, and paratha were also moved to the exempt (nil) category.

5% GST Products — Where Most FMCG Sits After September 2025

This is now the most important GST slab for kirana stores. After the September 2025 reforms, the majority of packaged and branded FMCG products that were previously at 12% or 18% moved here.

If you were billing correctly before September 22, 2025 and have not updated your billing software since, there is a good chance several of your items are showing the wrong rate.

Personal Care — Moved from 18% to 5%

This is where most kirana owners are getting it wrong in 2026.

Colgate-Palmolive’s entire India portfolio — toothpaste, toothbrush — moved from 18% to 5%. Hindustan Unilever’s soap and shampoo range moved from 18% to 5%. Dabur’s hair oil and shampoo products moved from 18% to 5%. If you sell these brands and have not updated the rate, every invoice since September 22, 2025 has a GST error.

Food and Grocery — Moved from 12% to 5%

Snacks and Packaged Foods — Moved from 18% to 5%

Note on chips: This is a specific change many billing systems have missed. Potato chips, which were at 18%, are now at 5%. If your billing software was not updated after September 22, 2025, it likely still shows 18%.

Other 5% Items

In short: After September 2025, soap, shampoo, hair oil, toothpaste, namkeen, ghee, instant noodles, biscuits, chocolates, and potato chips are all at 5%. If your invoices show 12% or 18% on these items, they are incorrect and need to be updated immediately.

18% GST Products — Still Relevant for Kirana Stores

Not everything moved to 5%. Some processed and premium items remain at 18%.

Deodorants are a frequent confusion point. Soaps and shampoos moved to 5%. Deodorants did not. They remain at 18%. If you sell both on the same counter, apply different rates.

In short: Packaged drinking water, ice cream, deodorants, shaving cream, and cosmetics beyond basic skincare remain at 18%. These were not moved in the September 2025 reforms.

40% GST — The New Sin Goods Category

This is an entirely new slab introduced by GST 2.0.

Before September 2025, aerated drinks attracted 28% GST plus a compensation cess. The combined effective rate was often around 40% when both were added. The reformed structure consolidated this into a clean 40% rate.

Important note on tobacco: The GST Council deferred the implementation of new rates on tobacco, pan masala, cigarettes, and gutkha. These products continue at the existing rate of 28% plus compensation cess until the government’s compensation loan obligations to states are fully discharged. A notification will be issued when the new rate takes effect.

If you sell cold drinks, update your billing to 40%. If you sell pan masala or tobacco, keep the old rate until you receive an official notification.

In short: Aerated drinks — Coke, Pepsi, Sprite, energy drinks — are now at 40%. Tobacco and pan masala remain at old rates for now. The 40% slab does not apply to fruit juices, plain water, or milk-based drinks.

Branded vs Unbranded — The Rule That Trips Everyone

This one distinction explains more GST errors than any other.

The basic principle: Unbranded, loose goods sold without packaging — generally nil or lower rate. Branded, packaged goods sold in manufacturer’s packaging — higher rate.

The error pattern is predictable. A supplier sends an invoice for branded Aashirvaad atta with 5% GST charged. The kirana owner copies that rate for the retail sale. But if the kirana store is selling loose, unbranded atta from an open sack, the correct rate is 0% — not 5%.

The same product, in two different forms, carries two different rates.

Where branded does not change the rate:

• Soap: 5% regardless of brand or form
• Tea: 5% whether loose or branded Tata Tea
• Edible oil: 5% whether in tin or branded bottle

The branded vs unbranded rule applies primarily to food staples — grains, pulses, flour, and fresh dairy. For personal care and packaged foods, the rate is fixed regardless of branding.

When in doubt: check the specific HSN code on the official CBIC portal at cbic.gov.in, not a third-party source.

50+ Product Quick Reference Table

Verify specific HSN codes at cbic.gov.in before using for filing. Source: 56th GST Council Notifications, CBIC, September 2025.

Verify product-specific rates at: cbic.gov.in Rates effective from September 22, 2025 except deferred items.

Common Kirana Store GST Mistakes

These are the five errors GST officers find most frequently in kirana store audits.

Mistake 1: Not updating rates after September 2025

The most common error in 2026. Soaps, shampoos, namkeen, and instant noodles are still being billed at 12% or 18% in thousands of stores. Every invoice since September 22, 2025 with a wrong rate is a compliance liability.

Mistake 2: Applying the supplier’s rate to the retail sale

A supplier bills at 5% GST on branded atta. The kirana store then bills their customer at 5% on loose atta. But loose atta at retail is 0%. Purchase rate and sale rate are independent. Verify each separately.

Mistake 3: Treating all personal care the same

Soaps and shampoos: 5%. Deodorants: still 18%. Toothpaste: 5%. Shaving cream: still 18%. These are sold from the same shelf but carry different rates. Applying a single rate to all personal care items is wrong.

Mistake 4: Wrong cold drink rate

Before September 2025: cold drinks attracted 28% plus cess. After September 2025: cold drinks are at 40% — one clean rate. Many billing systems default to either 28% or the old combined rate. Verify this specifically if you sell cold drinks.

Mistake 5: Skipping HSN in GSTR-1

CBIC has made HSN summary mandatory in GSTR-1. Businesses with annual turnover below ₹5 crore must report at 4-digit HSN. Above ₹5 crore: 6-digit HSN. Omitting HSN from returns creates mismatches and attracts notices.

How to Set the Correct Rate in Five Steps

Do this once. Every invoice after that will carry the correct rate automatically.

Step 1: List every product in your inventory

Write it down or export it from your billing system. Include both the product name and whether it is branded-packaged or loose-unbranded.

Step 2: Find the correct HSN code for each product

Two reliable sources:

• cbic.gov.in — official, free, always updated
• accountune.com/hsn-code-finder — product-name search, store-type specific

Do not rely on old printed lists or pre-2025 guides. Rates have changed.

Step 3: Cross-check against September 2025 changes

Flag every product that was previously at 12% or 18%. Verify its new rate against the official CBIC notifications. Pay specific attention to: soaps, shampoos, namkeen, chips, biscuits, chocolates, instant noodles, ghee, butter.

Step 4: Update your billing software

In Accountune: Go to Products → Find the product → Edit → Update HSN code → Save. The correct GST rate will auto-apply to every future invoice for that product.

If using Excel or manual billing: Create a rate reference column next to your product list. Update it and refer to it every time you raise an invoice. Manual billing carries significantly higher error risk.

Step 5: Raise a test invoice

Select five products across different GST categories — 0%, 5%, 18%, 40%. Raise a test invoice. Check each GST amount carefully. If any amount looks off, go back and verify the HSN code and rate.

How Accountune Handles GST Rate Updates

Accountune is a cloud-based GST billing software used by 12,000+ Indian small businesses as of 2026, starting at ₹799 per year. The software includes a pre-loaded database of 10,000+ products with HSN codes and current GST rates — updated to reflect all September 2025 GST 2.0 changes.

When a store owner adds a product for the first time, Accountune suggests the correct HSN code from its database. Once the owner selects the HSN code, the correct GST rate applies automatically to every invoice for that product — without any manual intervention.

Unlike Tally, which starts at ₹18,000+ per year, requires accounting knowledge, and runs only on desktop, Accountune works on mobile and web browsers, requires no accounting background, and is available at ₹799 per year.

Unlike Vyapar, which is Android-only, Accountune is accessible on any device — iOS, Android, and web browser.

A 4-day free trial is available at accountune.com without a credit card.

What Our Customers Say

“I had not updated my soap and shampoo rates after September 2025. Accountune’s audit check flagged it before my GST officer did. Saved me a lot of trouble.”

— Vivek Agarwal, General Store, Indore ⭐⭐⭐⭐⭐ | Using Accountune since 2023

“I was billing ghee at 12% from my old rate list. My accountant told me to check Accountune — the software had already updated it to 5%. Did not have to do anything manually.”

— Anjali Patel, Kirana Store (2 locations), Surat ⭐⭐⭐⭐⭐ | Using Accountune since 2024

“My CA used to charge ₹2,000 per GST filing. I now file GSTR-1 myself using Accountune. The HSN summary is generated automatically from the billing data. Saved ₹24,000 last year.”

— Ramesh Gupta, Grocery and Provision Store, Varanasi ⭐⭐⭐⭐⭐ | Using Accountune since 2022

Testimonials are representative of typical user experiences.