The government is set to slash goods and services tax (GST) rates on nearly 175 products — including daily-use items, hybrid cars, and consumer electronics — as part of Prime Minister Narendra Modi’s major tax overhaul, sources told Reuters.

Consumer goods relief

Everyday products like toothpaste, talcum powder, and shampoos could see GST reduced from 18% to 5%, a move expected to boost sales for FMCG giants such as Hindustan Unilever and Godrej Industries.

Electronics ahead of festive season

High-ticket consumer electronics including televisions and air conditioners may get cheaper, with tax rates likely to be cut from 28% to 18%. The change could significantly lift sales for brands like Samsung, LG, and Sony ahead of the Diwali shopping season beginning in October.

Hybrid cars gain

Small petrol hybrid cars are also expected to benefit, with tax rates proposed to drop from 28% to 18%. The decision would be a win for automakers like Toyota and Maruti Suzuki, which have long lobbied for lower taxes on hybrids, calling them a cleaner alternative to petrol-only vehicles.

GST council to decide

The final list of products will be decided at the GST Council meeting on September 3-4, chaired by Finance Minister Nirmala Sitharaman with state finance ministers in attendance.

The proposed overhaul stems from Modi’s Independence Day pledge on August 15 to cut taxes on essential items. While the finance ministry has not issued a formal statement, the move could provide a boost to consumption at a time when growth concerns and weak corporate earnings have weighed on sentiment.

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