GST rates fixed: Here are the winners and losers
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The wait is over: India has cleared the way for the biggest tax reform since independence in 1947.
The main beneficiaries of the new goods and services tax, due to be rolled out on 1 July 2017, include steelmakers and some consumer goods, though personal care items including sanitary ware will be taxed at the top rate, along with appliances such as air conditioners.
Here’s a look at the winners and losers:
Fast-Moving Consumer Goods
The sector is a clear winner. Consumer staples including milk, fruits and vegetables, grain and cereals have been exempted. Sugar, tea, coffee and edible oil will be taxed the lowest rate of 5%. Companies that may gain include Hindustan Unilever, Nestle India and Dabur India.
Here the impact is likely to be marginal. Vehicles already attract different levies, which add up to 28% — the peak GST rate fixed for the sector. Gains derived from a unified tax system may still be passed on to consumers, analysts say. Maruti Suzuki India, Tata Motors and Mahindra & Mahindra could benefit.
Appliances such as air-conditioners, refrigerators and washing machines will attract the peak rate, which is slightly higher than the existing tax slab. Companies may increase prices to preserve margins, Nirmal Bang Equities said in a note. Whirlpool of India, Voltas and Havells India could be impacted.
A reduction in tax on coal and metal ore to 5% will cut input costs for steelmakers, benefiting companies including JSW Steel, Vedanta, Tata Steel and Hindalco Industries.
A 5% tax rate on equipment like solar panels and wind turbines may help keep a lid on project costs for developers such as Inox Wind and Suzlon Energy. Bloomberg