Factbox: Companies and products covered by India's consumption tax regime

LG Electronics

15/08/2025 15:40

NEW DELHI, Aug 15 (Reuters) - Indian Prime Minister Narendra Modi's government on Friday announced a plan to lower rates and simplify its goods and services taxes (GST) by October, a move to boost domestic demand amid U.S. tariff headwinds.

Modi's announcement comes as India moves to simplify its GST structure, with a group of ministers preparing a report that will consider merging tax categories and lowering rates on some products.

The country currently levies GST at 5%, 12%, 18% and 28% on most goods and services, excluding gold and silver, and applies an additional levy on so-called demerit items such as cigarettes and high-end cars.

Below are current tax rates of the different categories, and products and companies that could be affected:

THE HIGHEST 28% TAX CATEGORY

* Cars made by likes of Maruti Suzuki MRTI.NS, Hyundai 005380.KS and Tata Motors TAMO.NS are currently subject to a tax rate of 28%. Big and luxury cars have to pay higher additional levies than smaller cars.

*  Consumer durables such as air conditioners and refrigerators fall in this tax category and any move could benefit sales of Samsung 005930.KS and LG Electronics 066570.KS

* Cigarettes, along with aerated drinks, attract additional levies. Horse racing clubs and gambling services, 5-star hotel accommodation also fall under this category.

THE 18% CATEGORY

*  Personal care items like hair oil, toothpaste, ice cream,  shampoos and deodorants.

*  Mobile phones and industrial chemicals are also subject to this tax rate. Tax changes here could affect Apple AAPL.O and Xiaomi 1810.HK

*  Health and life insurance products

THE 12% CATEGORY

Most products in this category are likely to become cheaper, a government source has said. Consumer majors like Nestle NESN.S to Hindustan Unilever HLL.NS to Procter & Gamble PG.N retail many products at this tax rate, which covers:

*  Processed & packaged foods - butter, processed foods

*  Dry fruits such as almonds

*  Fruit juices, packed coconut water

*  Ready-to-eat vegetable/fruit preparations, pickles, jam, jelly

THE 5% GST CATEGORY

*  Household essentials like sugar, tea, edible oils, milk

*  Footwear and clothes priced below $10

*  Certain life-saving drugs

 (Reporting by Aftab Ahmed; Editing by Aditya Kalra and Toby Chopra)

 ((Aftab.Ahmed@thomsonreuters.com; +91 99109 33884;))