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Modi's tax reform has seen levies cut on TVs, shampoos and hybrid cars

Two sources revealed new details about Prime Minister Narendra Modi’s major tax reform. India will cut consumption tax on 175 products, including shampoos, hybrid cars, and consumer electronics. Two sources revealed that India plans to reduce goods and services taxes (GST) from 18% down to 5% on products like talcum, toothpaste, and shampoo. This is expected to boost sales at companies such as Hindustan Unilever, and Godrej Industries.

Before the Diwali shopping period, which begins in October, brands such as Samsung, LG Electronics and Sony will dominate sales, consumer electronics, like air conditioners, televisions and other electronic devices, could see their rates fall from 28% down to 18%.

Toyota Motor and Maruti Suzuki, who have lobbied for years to lower tax on a technology that they claim is cleaner than petrol vehicles, will be pleased with the proposed reduction on small petrol-hybrid cars from 28% to 18%. On September 3-4, the GST council will decide which goods and services India plans to reduce taxes on. The GST council is led by federal finance Minister Nirmala Sitharaman with representation from all the states. Modi's Independence Day speech, delivered on August 15, in which he promised to reduce taxes on everyday items but did not provide details, triggered the sweeping changes.

India's Finance Ministry did not respond to an email asking for comments about this story. (Reporting and editing by Nikunj Ahri, Aditi Sha; Toby Chopra is the editor)

(source: Reuters)