GST will indeed provide a boost to the Indian economy and corresponding results can be seen on the stock market indices which are nothing but aggregate of Indian Inc.
Sectors which have long value chain from basic goods to final consumption stage with operation spread in multiple states such as FMCG, pharma, consumer durables, etc should benefit. FMCG companies could generate substantial savings in logistics and distribution costs as the need for multiple sales depots will be eliminated
FMCG companies pay nearly 24-25 per cent including excise duty, VAT and entry tax and a lower rate of 18 per cent could yield significant reduction in taxes. But a higher GST rate of 28 per cent for consumer durables and some FMCG products may disappoint the market. Warehouse rationalisation and reduction of overall tax rates, is expected to generate saving.
Automobiles sector could too benefit from GST from lowering of rates however high premium cars would attract highest slab rate which is negative for the sector.
Telecom sector would also benefit from GST. Their services would be taxed at 18% as against 15% now. There is hue and cry among the telecom operator on incerase int eh rate but this time after implementation of GST they would be able to get credit of inputs which would ultimately lower the tax incidence.
Sectors which have long value chain from basic goods to final consumption stage with operation spread in multiple states such as FMCG, pharma, consumer durables, etc should benefit. FMCG companies could generate substantial savings in logistics and distribution costs as the need for multiple sales depots will be eliminated
FMCG companies pay nearly 24-25 per cent including excise duty, VAT and entry tax and a lower rate of 18 per cent could yield significant reduction in taxes. But a higher GST rate of 28 per cent for consumer durables and some FMCG products may disappoint the market. Warehouse rationalisation and reduction of overall tax rates, is expected to generate saving.
Automobiles sector could too benefit from GST from lowering of rates however high premium cars would attract highest slab rate which is negative for the sector.
Telecom sector would also benefit from GST. Their services would be taxed at 18% as against 15% now. There is hue and cry among the telecom operator on incerase int eh rate but this time after implementation of GST they would be able to get credit of inputs which would ultimately lower the tax incidence.
GST on Stock Market - Sectors to Benefit from GST Implementation
Reviewed by Author
on
May 29, 2017
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Reviewed by Author
on
May 29, 2017
Rating:
