‘GST will drive consumption of FMCG products’

New Delhi, May 19

Tax rates on fast moving consumer goods (FMCG) items under GST will drive consumption, although a few home care products and shampoos could become pricier, according to industry players.

The country’s largest FMCG firm Hindustan Unilver (HUL) said laundry detergents and dish washing bars, which have been taxed at 28 per cent, must be given the same treatment as other daily necessity products in the interest of consumers to maintain basic hygiene.

Welcoming the overall classification, Marico Ltd MD and CEO Saugata Gupta said: “We understand that the GST rate structure is extremely positive, encouraging and augurs well for the industry. It is anti-inflationary in nature and will help drive consumption as well as long-term economic growth.”

Expressing similar views, Dabur India Chief Financial Officer Lalit Malik said: “Overall, the new rates are marginally favourable.”

He further said that except for home care products and shampoos, which will attract 28 per cent GST, most FMCG products have been placed at 18 per cent or below levels and this is on the expected lines.

An HUL spokesperson said the rates are on the expected lines except for laundry detergents and household care products which have been taxed at the rate of 28 per cent.

“The laundry detergents and dish washing bars are daily necessity products used by families for cleaning purposes hence in the interest of consumers and to maintain basic hygiene and cleanliness it is important that they get the same treatment as other daily necessity products,” the spokesperson said.

The GST Council, headed by Union Finance Minister Arun Jaitley, has kept commonly used products like hair oil, soaps and toothpaste at 18 per cent.

These items at present attract 22-24 per cent tax incidence through a combination of central and state government levies.

Emami CEO (Finance, Strategy and Business Development) Naresh H Bhansali said that the GST rates are likely to benefit the industry. — PTI