Budget Impact on Personal Care Sector
Overall impact: Positive
Excise Duty
The abolition of 16% special excise duty (SED)
on cosmetics and toilet preparations is expected to lead to significant price
decreases (around 5-10%) for items such as shampoos, skin creams, talc, hair
oils, perfumed hair oils, gels etc. This will probably boost sagging demand
. Consequent to the abolition of SED, the rate of abatement on MRP for items
under these categories has been reduced from 50% to 40%.
On the flip side, the excise duty on toothbrush
has been increased for the second consecutive year, to 8%. Last year, the
excise duty was increased to 4% from nil earlier.
Cutoms Duty
A cut in peak customs duty to 30% from 35% will
benefit soap industry by lowering the price of inputs.
Customs duty on nylon 6,12 chips for making
nylon monofilaments for toothbrushes has been reduced from 35% to 25%.
Other Changes
The Finance Minister' decision to reduce income
tax benefits to individuals will lead to lower disposable income in their
hands. This may adversely affect demand for personal care products.
