In India Government has announced GST from 1st July 2017. But companies and traders are not yet ready for GST implement. See GST effect on stock market. And some of stocks have already rallied on GST rates. You can see GST benefits on various sectors. Therefore benefits come only after few quarters. Check GST on share brokerage.
Which sector will benefit from GST
Goods and Services Tax (GST) replace 17 indirect taxes. It is imposed for product and service being sold in India. However, GST rates falls under only 4 tax slabs. Such as 5%, 12%, 18% and 29%. So industries will get benefits with GST. In addition, like Dairy, Logistics, FMCG and warehouse sector will benefit more. As they can save more time and fuel at state borders.
However, power sector will gain more as thermal coal. It has been categorized under 5% GST compare to earlier 12% tax. Therefore some of these companies can see immediate impact from Q2. But few companies will impact from Q3 onwards. You can find below list of best stocks that can get benefit from GST in 2017.
It produces value added products. And non value added products are milk. But specialty in dairy powder, Ghee, condensed milk and cheese. Therefore cheese utilization is around 20-25 per cent. However, company expects an increase in cheese utilization up to 40-50 percent for next year. Moreover, 70 per cent of milk procurement is direct.
In addition, daily usage like food grains, milk and other milk products are exempted from GST. Hence this will boost company sales and profits. However, company is present in both Business to business (B2B) and B2C segment with contribution of 70 to 30 per cent.
Probably, company plans to expand its distribution network from 25 states in B2C (Business to consumer). In addition, like food grains, milk and other articles of daily use have been exempted from tax under GST. Hence, it gives good boost up to company.
Industries that have high unorganized sector market will benefit from GST. Therefore, air cooler has 70-80 per cent of market in unorganized sector. Moreover, 27-28 per cent is indirect taxes. And rates are expected to come down to 18 per cent as per GST. Because, Symphony is leading player in this sector will benefit more.
Similarly, segment will gain from lower GST rates. And also more recognized in sector. Hence, check how GST will benefit traders and manufacturers. Check best mid cap stock for 2017. For better understand see also look for latest Qtr financial performance before investing in such companies. See Symphony share price history.
Dabur Soaps and Oil fall under lower tax bracket of 18 per cent GST. Currently it falls under 26 to 28 per cent tax bracket. Therefore largest segment honey continues to fall under GST. Furthermore, Dabur India will get benefit out of these GST changes.
Therefore, Dabur can be an indirect benefit from GST. And rural inflation is major consumer staples coming under GST. Hence, see GST bill impact on share market 2017.
Colgate Palmolive India
Colgate India toothpaste contributes to 80 percent of company sales. GST impact on consumer sector is positive. In addition, many companies in sector will also gain potential result from unorganized segment. Under GST, rate is reduced from 27 to 28 per cent. And 18 percent tax pay on toothpaste. But patanjali and Dabur enjoys tax benefits. Probably, Colgate may gain market share by reducing prices.
Ashok Leyland (AL’s) has strong growth. And recent growth has been driven by demand and infra demands. Moreover, management expect improvement in infra sector. Apart from this, management expects exports and growth. Therefore company targets is 33 percent of revenue has to increase from export sector.
As per management, hub and model of transport of goods will gain by GST. And it will improve sales of company. Moreover, Ashok Leyland is pure play on truck business. Hence, view GST impact on home buyers, GST tax rates on properties
Hindustan Unilever (HUL)
HUL is expecting to gain market share on GST. Moreover, HUL contribute 25 percent revenue on toothpaste and soaps. However, lower taxes on toothpaste and soaps will benefit HUL. It is expects that people will move from unorganized sector to organized sector by purchasing branded products.
And also its raw material are taxed at GST rates of 0 to 5 percent get benefited. Further, benefits may arise from inputs tax credits.
Steel sectors that will get benefit from GST. Probably, New GST rate is finalized at 18 percent from steel. Moreover, Steel sector like Coal and Iron ore are pegged at 5 percent slab under GST. In addition, like JSW Steel and Tata Steel is looking at lower input costs. Such steel companies help in low input cost.
JSW Steel sector is biggest company. And this Steel sector will get benefit from GST. Therefore JSW steel also gets benefit from new GST. Hence, check list of large cap stock in NSE and BSE exchange. (http://www.financialwing.com/list-bse-companies-large-cap)
Most of FMCG products are marked to nearest existing slab. However, anti-profiteering is place in GST. Therefore companies need to pass on benefits to consumers. This will help in faster consumption of products. And consumers can shift from unbranded products to branded products. Check best large cap funds for 2017 to invest.
Finally, see GST benefit sectors. However, for better understand check how GST effect on stock market. Therefore view GST benefits stocks. Hence to more details see what GST is in India and which sector will benefit.