India is preparing to slash the Goods and Services Tax (GST) on nearly 175 products by at least 10 percentage points, as part of Prime Minister Narendra Modi’s major tax reform initiative, according to two sources familiar with the matter. The plan includes cutting GST on everyday consumer goods like toothpaste, talcum powder, and shampoo from 18% to 5%, which could significantly boost demand for companies such as Hindustan Unilever and Godrej Industries.
Additionally, the GST on consumer electronics like televisions and air conditioners is expected to drop from 28% to 18%, just ahead of the festive Diwali season when brands like Samsung, LG, and Sony see peak sales.
A tax reduction on small petrol hybrid cars—from 28% to 18%—is also being considered, benefiting automakers like Toyota and Maruti Suzuki, which have long pushed for lower taxes on hybrids, citing their environmental advantages.
The final decision will be made during the GST Council meeting on September 3–4, chaired by Finance Minister Nirmala Sitharaman and attended by state representatives. The move follows PM Modi’s Independence Day promise to reduce taxes on daily-use items.
