- The GST council decided to move to a two rate
structure – 5% and 18% with a special maximum rate of 40% with effect from
22nd September.
- Tax rates have been slashed across
categories, with maximum benefit to FMCG, fertilizers, agricultural and
medical equipment’s followed by cement, auto and durables.
- Health and life insurance will be exempt
from GST.
- Tobacco products, luxury items will be
charged at the highest rate of 40%.
- GST council indicated that the fiscal impact of
the rate rationalisation would be to the tune of INR 480 Bn (0.15% of
GDP).
GST Reforms:
Overview of Tax Rate Changes Across Key Product Categories
|
Product Categories |
New Rate |
Current Rate |
|
Ayurvedic products |
5% |
12% |
|
Branded Namkeens,
Bhujia,Extruded snacks |
5% |
12% |
|
Butter/Cheese/Ghee/Condensed
Milk |
5% |
12% |
|
Chocolates |
5% |
18% |
|
Dry fruits/Nuts |
5% |
12% |
|
Diapers |
5% |
12% |
|
Biscuits/cookies/cakes |
5% |
18% |
|
Paneer |
NIL |
5% |
|
Toothpowder |
5% |
12% |
|
Instant
noodles/pasta/cornflakes/ketchup |
5% |
12% |
|
Fruit Juices (non-aerated) |
5% |
12% |
|
Paperboards |
5% |
12% |
|
Packaged Water |
5% |
18% |
|
Ice-creams |
5% |
18% |
|
Hair Oil |
5% |
18% |
|
Shampoo |
5% |
18% |
|
Shaving Cream/Lotion |
5% |
18% |
|
Toothpaste/toothbrush |
5% |
18% |
|
Soaps |
5% |
18% |
|
Coffee |
5% |
18% |
|
Pencils, Sharpener, Crayons |
0% |
12% |
|
Exercise book |
0% |
12% |
|
Mathematical/Geometry box |
5% |
12% |
|
Sin Goods |
New Rate |
Current Rate |
|
Aerated beverages |
40% |
28% + |
|
Cigarettes |
40% |
28% + |
|
Home care segments |
New Rate |
Current Rate |
|
Detergents/Homecare |
18% |
18% |
|
Household Insecticides |
18% |
18% |
Source: JM Financial
GST rate cut
– key beneficiary & losers
|
Sector |
Beneficiary stocks |
|
Auto |
|
|
4-W |
Maruti |
|
2-W |
Hero Moto, TVS, Eicher Motors |
|
CV |
Ashok Leyland |
|
Tractors |
M&M, Escorts Kubota, VST
Tillers |
|
Auto Ancillary |
SJS Enterprises, Motherson Sumi
Wiring, Uno Minda |
|
Consumer durables |
Blue Star, Voltas, Havells,
Dixon Tech |
|
Insurance |
Star Health, Nuva Bupa, PB
Fintech, LIC |
|
FMCG Stocks |
HUL, Dabur, Marico |
|
NBFCs |
Bajaj Finance, Chola Investrment |
|
Dairy Stocks |
Parag Milk |
|
Hotels |
Lemon tree |
|
Cement |
Ambuja Cement, Ultratech Cement |
|
Footwear |
Campus Shoes, Bata |
|
Medical equipments |
Poly Medicure |
|
Sector |
Losers |
|
Aerated beverages |
Varun Beverages |
|
Coal |
Coal India |
Source: JM Financial
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