light electrical and home building companies’ shares prices rallied up to 6 percent on Thursday as these firms may benefit from the upcoming 23rd meeting of GST Council that is scheduled to commence on November 10.

Hindustan Unilever, Asian Paints, Bata, Crompton Consumer, V-Guard, Kajaria Ceramics, Bajaj Electricals, Finolex Cables, Greenply Industries and Bombay Dyeing rallied 1-6 percent.

Motilal Oswal feels the GST Council is likely to make sweeping changes to the GST framework, with an aim to ease the compliance burden for small businesses and recalibrate the tax rates on many common-use goods that fall under the 28 percent slab.

By making changes to the GST framework, the Indian government is attempting to address the concerns facing the SMEs post the implementation of the new tax system.

The research house believes the reduction in rates will be a significant step toward tax simplification to support the trader community.

It also believes that the Council might look to lower rates for items in the consumer, light electrical and home building sectors.

According to the firm, this should positively impact companies like HUL, GCPL, Nestle, Asian Paints, Berger Paints, Kansai Nerolac, Titan, Bata, Havells, Crompton Consumer, Finolex, V Guard, Kajaria Ceramics, Somany Ceramics, Century Ply, and VIP industries, among others.

GST, which implemented with effect from July 1, has consolidated all indirect taxes into a single umbrella, and categorised them into four broad slabs (5, 12, 18 and 28%), along with a cess on luxury and demerit goods such as tobacco, pan masala and aerated drinks.

As of now, 200+ items fall in the 28 percent slab, which include common-use and luxury items.

 11 Nov 2017, 05:01 AM