Stocks to Watch: The Group of Ministers (GOM), formed to improve the GST rates of the Central Government, have expressed the possibility of recommending major changes in tax structure. According to sources, this proposal suggests to eliminate the existing GST slab of 12% and 28% and make extensive changes in the rate for different sectors. Its purpose is to simplify the tax system and rationalize the GST rate on practically goods.
Impact on agrochemical sector
According to a change in GST, GST can be reduced to 5% on fertilizer acids and bio-pesticides, which is currently 18% and 12%. This can directly benefit agrochemical players like UPL LTD, PI Industries and Rallis India.
Renewable energy sector changes
The GST rate on solar cooker, solar water system, energy equipment and related parts is proposed to be reduced from 12% to 5%. This can benefit companies of renewable energy sector like Adani Green Energy, KPI Green Energy, Sterling & Wilson Renewable Energy and Tata Power.
These sectors and companies benefit from GST reform
| Sector / category |
Potential beneficiary companies / brands |
| Agrochemical |
UPL LTD, Pi Industries, Rallis India |
| Renewable energy |
Adani Green Energy, KPI Green Energy, Sterling & Wilson Renewable Energy, Tata Power |
| Textile |
V-mart, Vishal Mega Mart, Vardhman Textiles, Arvind Ltd, Raymond Ltd, Page Industries, Welspun India |
| Apparel |
V-mart, Vishal Mega Mart, Vardhman Textiles, Arvind Ltd, Raymond Ltd, Page Industries, Welspun India |
| Footwear |
Bata India, Relaxo Footwears, Campus Activear |
Textile and apparel sector
It is proposed to reduce GST from 12% to 5% on products such as synthetic or artificial filament yarn, sewing threads, manmed staple fiber yarn, felt, giant yarn, metalized yarn, rubber thread, carpet and gauge from GST 12% to 5%. It is suggested to increase the limit of 5% GST from ₹ 1,000 to ₹ 2,500 and to apply 18% on clothes of more than ₹ 2,500 to 18%.
This is likely to benefit brands like V-Mart, Vishal Mega Mart, Vardhman Textiles, Arvind Ltd, Raymond Ltd, Page Industries and WHALSPUN India.
Impact on footwear sector
In footwear, GST can be increased from 12% to 18% on products priced more than ₹ 2,500. At the same time, footwear priced less than ₹ 2,500 is expected to be reduced from 12% to 5%. This change can benefit companies like Bata India, Relaxo Footwears and Campus Activear.
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When will the change in GST apply?
According to government sources, the central government is planning to implement the proposed change in GST Slab by mid -September. The GST Council meeting to be held on September 3-4 under the leadership of the Ministry of Finance will consider 12% and 28% slabs to be considered by 5% and 18% of 18%.
If the council approves, the business will get two weeks to implement changes in its system. Changes will be associated with the end of Pitrupaksha (7-21 September), so that shopping is not affected during the festive season.
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