Shampoo, Toothpaste, Hair Oil And Other Personal Care Products Get Cheaper As GST Council Cuts Tax To 5%

GST Rate List: The Goods and Services Tax (GST) Council on Wednesday, September 3, revamped India’s tax consumption since its launch in 2017, cutting tax rates on personal care products, household essentials, medicines, small cars and appliances. The GST Council has agreed to evaluate rates that could significantly reshape the tax structure for personal care items under the proposed two-slab system. Personal care products like shampoo, toothpaste, hair oil, Dental floss and others have been cut down from 18 per cent to 5 per cent. The reduction in the tax rate has directly benefited companies like Hindustan Unilever and Godrej Industries, also offering relief to the consumers who purchase these personal care products regularly.

The immediate impact of this tax shift would be a visible reduction in retail prices. A 13 per cent point cut in tax would lower the cost of these essentials, reducing the financial burden on households and putting more money in consumers’ hands. This personal care tax reduction plays a significant role ahead of the festive season and during Diwali. The consumer expenditure usually increases during this season and the lower prices would boost the demand further, encouraging both fresh purchases and bulk buying.

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Personal Care Products That Got Cheaper

The tax rates on personal care products such as shampoo, talcum powder, toothpaste, toothbrushes, face powder, soap and hair oil are slashed to 5 per cent from 18 per cent.

GST Tax Rates Slashed On Personal Care Products (Image Credits: Canva)

This shift in GST rates makes the items more accessible to a wider population, particularly middle and lower-income households, where hygiene and personal care products account for a larger share of monthly income. By reducing the tax rate, the Indian government has enabled direct relief and broadened access to daily-use essentials. This was proposed following the Prime Minister Narendra Modi speech on August 15, that is, Independence Day 2025, where he addressed tax reforms and promised cuts on everyday items, though without giving specifics.

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The 56th GST Council meeting was held on September 3-4, 2025. The GST tax rate changes on personal care items come as a strategic move after the Trump administration's imposition of a severe 50 per cent tariff on a wide array of Indian goods, which took effect on August 27, 2025. By shifting the tax rate of everyday consumer products like shampoo and toothpaste from 18 per cent to a 5 per cent GST slab, the Modi government is making use of a domestic policy tool to boost internal consumption and alleviate the economic crisis from the tariffs, encouraging a “vocal for local” approach to stand up against the blow to India's export-dependent industries.