GST 2.0 Kicks In From Today: Auto To FMCG—Sectors Poised To Reap Rate Cut Benefits
GST 2.0: Key sectors expected to benefit from the lower GST under this latest reform include the auto sector, banks, NBFCs, cement, FMCG, consumer staples, among others.
A major overhaul of the GST system comes into effect on Monday, Sept. 22. The new GST rate changes, approved by the GST Council earlier this month, will alter the tax burden across a wide range of items used every day.
Key sectors expected to benefit from the lower GST under this latest reform include the auto sector, banks, NBFCs, cement, FMCG, consumer staples, consumer durables, hotels, insurance, logistics, quick commerce and footwear.
Finance Minister Nirmala Sitharaman announced that the Council has decided to move away from the previous four-slab structure of 5%, 12%, 18% and 28%, opting instead for a simpler two-rate system of 5% and 18%. A higher rate of 40% has been reserved for certain categories such as high-end vehicles, tobacco and sin goods.
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Sectors & Companies To Benefit From GST 2.0
Auto companies like Maruti Suzuki India Ltd., Mahindra and Mahindra Ltd., Hyundai Motors India Ltd., Tata Motors Ltd., Ashok Leyland Ltd., Bajaj Auto Ltd., Hero MotoCorp., TVS Motors Ltd., Eicher Motors Ltd., will be beneficial with GST 2.0.
Bosch Ltd., Samvardhana Motherson Ltd., Uno Minda Ltd., Tube Investments Ltd., MRF Ltd., Bharat Forge Ltd., Balkrishna Industries Ltd., Endurance Tech Ltd., Exide Ltd., Apollo Tyres Ltd., Motherson Sumi Wiring Ltd., are the other auto ancillary companies under auto sector that will benefit from lower GST.
ICICI Bank, HDFC Bank, IDFC First Bank are among the banks that will benefit due to consumption pick up and consumer-heavy & credit card players.
NFBC player Bajaj Finance to benefit due to consumption pick up due to lower GST rates.
Cement companies like Ultratech Ltd., Ambuja Cement Ltd., ACC Ltd., Shree Cement Ltd., JK Cement Ltd., Dalmia Bharat Ltd., Heidelberg Ltd., Ramco Ltd., Nuvoco Vistas Ltd., Birla Corp. and India Cements Ltd., to benefit due to lower rate to aid volume.
FMCG and Consumer Staples companies like Hindustan Unilever Ltd., Britannia Ltd., ITC Ltd., Varun Beverages Ltd., Tata Consumer Ltd., Godrej Consumer Ltd., Dabur Ltd., Emami Ltd., Colgate Ltd., Marico Ltd., Heritage Foods Ltd., Parag Milk Ltd., Bikaji Ltd., Procter & Gamble Hygiene Ltd., Jyothy Labs Ltd., to benefit as lower GST on essential raw materials are in the 12% slab.
Consumer durable companies like Voltas Ltd., Havells Ltd., Blue Star Ltd., Dixon Ltd., Amber Ltd., Crompton Ltd., Whirlpool India Ltd., and PG Electroplast Ltd., to benefit as GST rate cut on air conditioners, TVs, mobile phones benefit.
Hotels companies like LemonTree Ltd., Indian Hotels Ltd., ITC Hotels Ltd., Chalet Hotels Ltd., Ventive Hospitality Ltd., HLV Ltd. (Leela), Mahindra Holidays and Resorts India Ltd., Juniper Hotels Ltd., Samhi Hotels Ltd., Taj GVK Hotels and Resorts Ltd., EIH Ltd., will benefit due to lower GST on the sub-Rs 7,500 room rent.
On Insurance front, companies like Niva Bupa Ltd., GoDigit Ltd., New India Ltd., ICICI Lombard Max Life Ltd., HDFC Life Ltd., LIC and Star Health Ltd., due to zero GST on policies sold to individuals.
Meanwhile, logistic company like Delhivery Ltd., will benefit as volumes are expected to rise.
Quick commerce companies like Eternal Ltd., Swiggy Ltd., will also benefit as lower GST to lead to higher consumption.
Relaxo Ltd., Bata Ltd., Campus Ltd., Metro Brands, are some of the footwear companies to benefit due to lower value products have lower GST.
