Tax on FMCG, food items may be cut

HOUSEHOLDS AND SMALL FOOD VENDORS TO BE AMONG BENEFICIARIES

- VIVEAT SUSAN PINTO

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.

"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.