Explained | Companies and products covered by India's current GST regime

New Delhi: Indian Prime Minister Narendra Modi's government on Friday announced a plan to lower rates and simplify its goods and services taxes (GST) by October, a move to boost domestic demand amid U.S. tariff headwinds.

Modi's announcement comes as India moves to simplify its GST structure, with a group of ministers preparing a report that will consider merging tax categories and lowering rates on some products.

The country currently levies GST at 5%, 12%, 18% and 28% on most goods and services, excluding gold and silver, and applies an additional levy on so-called demerit items such as cigarettes and high-end cars.

Below are current tax rates of the different categories, and products and companies that could be affected:

The highest 28% tax category

* Cars made by likes of Maruti Suzuki, Hyundai and Tata Motors are currently subject to a tax rate of 28%. Big and luxury cars have to pay higher additional levies than smaller cars.

* Consumer durables such as air conditioners and refrigerators fall in this tax category and any move could benefit sales of Samsung and LG Electronics

* Cigarettes, along with aerated drinks, attract additional levies. Horse racing clubs and gambling services, 5-star hotel accommodation also fall under this category.

The 18% category

* Personal care items like hair oil, toothpaste, ice cream, shampoos and deodorants.

* Mobile phones and industrial chemicals are also subject to this tax rate. Tax changes here could affect Apple and Xiaomi

* Health and life insurance products

The 12% category

Most products in this category are likely to become cheaper, a government source has said. Consumer majors like Nestle to Hindustan Unilever to Procter Gamble retail many products at this tax rate, which covers:

* Processed packaged foods - butter, processed foods

* Dry fruits such as almonds

* Fruit juices, packed coconut water

* Ready-to-eat vegetable/fruit preparations, pickles, jam, jelly

The 5% category

* Household essentials like sugar, tea, edible oils, milk

* Footwear and clothes priced below $10

* Certain life-saving drugs