The Union government is learnt to have proposed slashing the GST rate on personal care items to 5% from 18% earlier in new details emerging just ahead of the crucial GST Council Meeting on Wednesday. This along with a proposed cut in food and beverage items to nil and 5% respectively is likely to give a big boost to consumption, as indicated by the Centre earlier.
According to sources, oral care categories such as toothbrush, toothpastes, tooth powder and dental floss as well as skin care and hair care products such as soaps, shampoos, shaving creams and after-shave lotions will now attract a 5% GST from 18% earlier.
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“This is without doubt a significant development and something the FMCG industry had been asking for some time given that these products are daily essentials. If formalised, it will give a leg-up to consumption,” Mohit Malhotra, CEO, Dabur India, said. Dabur makes a raft of personal care items from hair oils to oral care products including toothpastes and tooth power (dant manjan), the latter used widely in rural areas.
Executives at Emami, Marico and ITC also expressed optimism at the proposed GST rate cuts in personal care. However, one official pointed to the absence of skin creams in the list of personal care items likely to be slashed to 5% from 18%, adding that they were an important part of the grooming regime of most people across urban and rural areas.
Daily essentials and food products under review
Among food items, the government has proposed to fully exempt from GST commonly consumed items such as loose paneer, khakhra, pizza bread, chapati, and roti, all of which currently attract 5% GST. Ultra-high temperature (UHT) milk may also attract nil GST, the document shows.
Also on the list of items that are fully exempt are ready-to-eat foods like paratha, parotta and other Indian breads, which are presently taxed at 18%. Experts said that with these products likely to be fully exempt, beneficiaries would include households and small food vendors.
Apart from exemptions, the government is also pushing for a rate reduction from 12% to 5% on several essential food items. These include butter,
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