ANI New Delhi

The latest Goods and Services Tax (GST) rate rationalization is expected to give a strong boost to the fast-moving consumer goods (FMCG) sector, according to a report by Nuvama. The report stated that almost the entire FMCG pack will benefit from the announced tax cuts, which will translate into lower prices for consumers and better margins for companies.

The tax cuts are likely to drive consumption growth through three key factors, higher disposable incomes, stronger promotional activities, and grammage additions in low-unit packs. It stated "Recent GST cuts are set to boost FMCG consumption via higher disposable incomes... larger packs shall benefit from price cuts/promotions". At the same time, larger packs will gain from price cuts and targeted promotions, making products more affordable for households.

Categories such as biscuits, toothpaste, soaps, shampoos, toothbrushes, and hair oils have witnessed key changes under the new GST structure, while cigarettes and CSD (Canteen Stores Department) products remain unchanged for now. Detergents, hair dye, household insecticides, skincare, and cosmetics also continue with the old rates, showing no change.