GST rates fixed: Here are the winners and losers
The main beneficiaries of the new goods and services tax (GST) rates include steelmakers and some consumer goods, though personal care items including sanitary ware will be taxed at the top rate
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