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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.
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, that 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.
"We are still awaiting clarifications on service tax, excise exemptions, post which we will be able to calculate the full impact," Malik added.
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.