Modi’s tax overhaul seen slashing levies on shampoos, hybrid cars and TVs, ETCFO
By Nikunj Ohri and Aditi Shah
NEW DELHI -India plans to cut consumption tax by at least 10 percentage points on nearly 175 products ranging from shampoos and hybrid cars to consumer electronics, said two sources, revealing new details of Prime Minister Narendra Modi’s major tax overhaul.
The proposal includes reducing goods and services tax (GST) on consumer items such as talcum powder, toothpaste and shampoo from 18% to 5%, a move expected to boost sales for companies like Hindustan Unilever and Godrej Industries.
Consumer electronics like air conditioners and televisions could see rates drop from 28% to 18%, ahead of the Diwali shopping season starting in October, when brands like Samsung, LG Electronics, and Sony dominate sales.
The proposed cut on small petrol hybrid cars to 18% from 28% is a win for Toyota Motor and Maruti Suzuki that have for years lobbied to reduce tax on a technology they say is cleaner than petrol cars.
The list of goods and services that India is planning to cut taxes on will be decided on September 3-4 by the GST council, which is headed by federal finance minister Nirmala Sitharaman and has representation from the country’s states.
The sweeping changes to the complex GST regime were triggered by Modi during his Independence Day speech on August 15, where he vowed to cut taxes on daily items without giving details.
India’s finance ministry did not immediately reply to an email seeking comments on this story.
(Reporting by Nikunj Ohri and Aditi Shah; Editing by Toby Chopra)
