GST 2.0: Cheaper Shampoos, TVs, and Hybrid Cars—India’s Big Festive Tax Cut

Ahead of the September 3–4 GST Council meeting, the Modi government is rolling out its most significant tax revision in nearly a decade. The sweeping reform—dubbed GST 2.0—aims to cut consumption taxes on around 175 everyday and consumer-durables products, a move expected to transform festive-season buying.

Key Highlights:

Personal Care Products e.g., shampoos, toothpaste, talcum powder: GST may fall from 18% to 5%, significantly reducing household spending on daily essentials.

Consumer Electronics: Items like TVs and air conditioners could drop from 28% to 18%, just in time for Diwali shopping.

Small Hybrid Cars: GST may slide from 28% to 18%, giving a boost to automakers such as Toyota and Maruti Suzuki.

GST Structure Overhaul: The current four-tier tax system 5%, 12%, 18%, 28% may be condensed into just two—5% for essentials and 18% for standard goods, while a 40% slab may apply to luxury/sin items.

Strategic Objectives: These tax cuts aim to stimulate consumption, support local manufacturing, and counter slowing exports amid U.S. trade tensions.

How It Will Impact the Indian Market

Sector   Expected Impact
Consumer Goods   Lower GST on shampoos and toiletries should boost demand—great news for players like Hindustan Unilever and Godrej Industries.
Electronics Retail   Cheaper GST ahead of Diwali is expected to spike sales of TVs and ACs—benefiting brands like Samsung, LG, and Sony.
Automobiles   Hybrid cars will be more price-competitive, aiding automakers like Maruti Suzuki and Toyota. However, EV market dynamics should be monitored carefully.
Overall Consumption   The reforms are likely to ignite consumer spending, giving a shot in the arm to FMCG, retail, and small-ticket durable goods sectors.
Stock Market Sentiment   Indian equities are already seeing positive momentum—Nifty and Sensex are poised higher amid GST reform optimism.

Bottom Line

India’s GST 2.0 represents a bold fiscal pivot designed to put more money into consumer hands, boost festive-demand, and shore up domestic manufacturing. If implemented, the changes could ripple across FMCG, electronics, and auto sectors—while giving Indian market sentiment a meaningful lift.

By Nehal Taparia

This content is for educational and knowledge purposes only and should not be considered as investment or Trading advice. Please consult a certified financial advisor before making any investment or Trading decisions.

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Our Recent FAQS

Frequently Asked Question &
Answers Here

Q1: What’s driving this GST reform now?

Prime Minister Modi flagged the initiative during his Independence Day speech to make daily items more affordable. Now, the government is acting ahead of Diwali to spur consumption, boost manufacturing, and buffer against export headwinds.

Q2: Which household items are likely to get cheaper?

Personal care products like shampoos and talcum powder could drop from 18% to 5% GST, while TVs and ACs may see a 28% to 18% cut.

Q3: How will the auto market respond?

Small hybrid cars might become more affordable with GST lowered to 18%. Automakers like Toyota and Maruti Suzuki stand to benefit, though there are concerns about implications for EV adoption.

Q4: What does simplifying GST slabs achieve?

By merging multiple rates into just two 5% and 18%, the reform aims to reduce compliance burden, enhance transparency, and make pricing simpler for consumers and businesses alike.,

Q5: What sectors will benefit most?

Key beneficiaries include personal care firms e.g., Hindustan Unilever, Godrej, electronics brands Samsung, LG, Sony, and automakers with hybrid models Toyota, Maruti Suzuki.