The Indian government plans to cut GST by at least 10 percent on several consumer goods ranging from shampoos to hybrid cars to consumer electronics said reports.
If sources are to be believed, this shall be a part of Prime Minister Narendra Modi’s tax overhaul. And a part of the ‘make in India’ initiative popularized by the Modi government. This shall help strengthen the call to use more of Indian products.
PM Modi proposed reducing goods and services tax (GST) on consumer items such as talcum powder, toothpaste and shampoo from 18% to 5% by India-based major companies.
This move is also being said to be a major step against the increased tariffs by the USA government and the strained trade relations. arly a decade comes amid strained trade ties with the US, with Modi making repeated calls for increased use of Indian products. During his Independence Day speech Modi said daily products for people in India will become cheaper.
The uncertainty around US tariffs, in particular, may temper corporate risk-taking. Domestically, possible GST rate rationalization, cumulative 100 basis points cut in policy rates so far this year, and “Festive season impetus, favourable monsoon and sustained government thrust through capital expenditure are expected to underpin consumption and partially cushion the drag from adverse global cues,” NSE’s Macro Review report said.
It is worth mentioning here that the Goods and Services Tax (GST) collections in August, in gross terms, rose 6.5 per cent to about 1.86 lakh crore compared to about 1.74 lakh crore in the same month last year, according to official data released.
In the month of August, collections of Central-GST, State-GST, and Integrated-GST rose year-on-year, and cess all jumped year-on-year.
So far in 2025-26 – April-August, the GST collections rose 9.9 per cent to about Rs 10 lakh crore, as against Rs 9.13 lakh crore in the same period last fiscal. In this case also, all components – CGST, SGST, IGST, and cess – rose.
India’s Goods and Services Tax (GST) system has achieved a major milestone in 2024-25, with a record gross collection of Rs 22.08 lakh crore, showing a 9.4 per cent growth over the previous year. The average monthly GST collection stood at Rs 1.84 lakh crore, the highest since GST was launched in 2017.
GST collections have steadily increased over the years, rising from Rs 11.37 lakh crore in 2020-21 to Rs 20.18 lakh crore in 2023-24, reflecting stronger economic activity and better compliance.
India’s GST council, headed by Finance Minister Nirmala Sitharaman is expected to finalize the list of items for tax cuts in a meeting scheduled to be held from September 3-4.