How will the recent GST changes affect the various areas of the economy?

ET Intelligence Group: The rationalization of the GST slab is expected to increase overall consumption and support economic development. However, the accurate effect varies up to the sector -security and will depend on the factors, including the impact of the input tax credit and the cost of mediation. Sachin Kumar and Ranjit Shinde analyzes the effects of the field.

Car

Two-wheeler (2W), passenger car and tractor companies will be the main beneficiary. Reducing GST from 18% at 2 WS, 350cc below and 28% to 1,200cc. In addition, effective duty on larger cars will be 40% compared to the previous 43-50%. Mahindra and Mahindra, Maruti Suzuki India and Escort Kubota will be the main beneficiaries. GST will be negatively affected by GST 31% to 40%, including Eicher Motors and Bajaj Auto toe, 2W producers of more than 350cc bikes.

B finance and money
Although there is no direct benefit, the expected increase in white goods consumption is likely to improve, which benefits the retail -centered lender, including Bajaj Finance, ICICI Bank and HDFC Bank.

Cement

Cement prices are likely to decrease by $ 25-30 per 50 kg bag. An additional impact in coal GST, a major input, is likely to neutralize from 5% to 18%, although the green energy cess of ₹ 400 per tonne will not be charged more separately but will now be a part of GST. While these changes are expected to change at least near -term demand, cement manufacturers are expected to show an improved financial in the next quarters after monsoon receipes increase after construction activities. UltraTech Cement, Ambaja Cement is well placed to benefit from this.

Chemicals and fertilizers

On key raw materials such as sulfuric acid, nitric acid, ammonia, micronutrants, menthol and its derivatives, 5% of the field sector, including GST, Arti Industries, Tata Chemicals, GSFC, Deepak Fertilizers and RCF.

Consumer goods
Manufacturers of Air Conditioner, TV and Dishw Hers Shaher, including Voltas, Blue Star, Hewels, benefit from reduction of GST on these goods from 28% to 18%. Food and personal care such as HUL, Maryco, Dubur, Britannia and Nestlé sells fast moving consumer goods (FMCGs) in the category, with 12-18% to 5% after GST reduction.

Hotel
Room reduces GST at 5% 12% at the average room rates below 7,500. This is good for lemon tree hotels and ginger chains of Indian hotels.

Insurance
Traditional schemes, such as pure security schemes imposed at 18%, will benefit the most from the exemption. However, a Neil GST will take advantage of the input tax credit (ITC). Companies with high traditional business and LIC, HDFC life and maximum financial services such as low -cost companies will benefit more than ICICI Prudential and SBI life.

Power
GST reduction on solar sales grows well for renewable energy companies, including 12% to 5% ACME Solar, Very Energy and Premier Energy. Thermal power manufacturers like NTPC and Tata Power, on the other hand, are likely to be 5% to 18% from the GST increase on coal.

Cloth, loose and footwear
GST reductions are expected to benefit from artificial yarn, textile floor coverings, towels, woven fabrics and technical fabrics, to benefit from Welspun Living, Wardhman Textiles and Trident. Bata India and Relaxo footwear could benefit from reduction of GST on footwear below 500 2,500. Retailers, including Trent, Aditya Birla Fashions and Go Fashion, can benefit from the reduction of the rate. However, the highest companies, including Vedanta Fashions and Raymond, can withstand GST victims.