GST Council Should Consider Reducing Tax on Household Insecticides to 5 Percent: EY-HICA Report

Reducing GST on Household Insecticides Could Combat Vector-Borne Diseases

A recent report by EY-HICA suggests that the Goods and Services Tax (GST) Council should consider reducing the tax rate on household insecticides to 5 per cent from the current 18 per cent to combat vector-borne diseases and strengthen preventive healthcare outcomes.

Household insecticides, including liquid vapourisers, coils, and aerosols, play a vital role in India's preventive health ecosystem, particularly at the household level, where protection against vector-borne diseases remains uneven. The joint report by EY-Home Insect Control Association (HICA) examines the impact of the current 18 per cent GST rate on the affordability, access, and usage of these products, especially among vulnerable and high-risk populations.

The report evaluates the public health case for realigning the tax treatment of household insecticides to a lower 5 per cent rate, in line with other essential hygiene and health-protective products. The current treatment of household insecticides may not be fully aligned with their public health relevance, despite their strategic importance and the recent GST 2.0 rationalization, where several health-oriented FMCG and pharmaceutical essentials have been repositioned into lower tax brackets.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Rationalizing the GST rate of household insecticides to 5 per cent, along with providing clear classification within the GST schedule, will improve affordability, discourage the proliferation of substandard products, and support greater formalization of the sector. This move could have a significant impact on the public health challenge posed by vector-borne diseases, such as malaria, dengue, chikungunya, and several others.

The household insecticides industry in India has grown significantly, with market penetration already at 92-99 per cent in urban areas and 64-73 per cent in rural areas. The household insecticide market expanded from Rs 7,147 crore in 2023 to Rs 8,138 crore in 2025, according to the report.

Note: The market growth reflects the growing importance of household insecticides in India's preventive health ecosystem.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline