New Delhi | FMCG, consumer durables and cement stocks ended higher on Thursday as common-use items from hair oil to ice creams and TVs will cost less after the GST Council approved a complete overhaul of the tangled Goods and Services Tax regime.
The GST Council approved limiting slabs to 5 per cent and 18 per cent, effective from September 22 -- the first day of Navaratri.
Shares of Emami jumped 3.95 per cent, Colgate Palmolive rallied 3.57 per cent, Britannia Industries climbed 2.87 per cent, Dabur India went up by 1.75 per cent, Nestle India (1.50 per cent) and Hindustan Unilever (0.21 per cent) on the BSE.
The BSE FMCG index climbed 0.31 per cent to 20,996.04.
Among consumer durables stocks, V-Guard Industries advanced 2.05 per cent, Havells India (1.05 per cent), Whirlpool of India (0.84 per cent), Amber Enterprises (0.54 per cent) and PG Electroplast (0.30 per cent).
The BSE Consumer Durables index ended marginally higher by 0.03 per cent at 62,340.13.
Among cement stocks, Sagar Cements zoomed 8.58 per cent, Nuvoco Vistas climbed 1.65 per cent, Grasim Industries rallied 1.60 per cent, Orient Cement went up by 0.69 per cent, Shree Cement (0.50 per cent), Heidelberg Cement (0.42 per cent) and The Ramco Cements (0.29 per cent).
Hotel stocks also ended higher, with Lemon Tree Hotels rising by 0.59 per cent, Taj Gvk Hotels & Resorts (0.50 per cent), Schloss Bangalore (0.45 per cent) and Indian Hotels Company (0.10 per cent).
Almost all personal-use items and aspirational goods for the middle class, such as AC and washing machines, will see rate cuts as the government looks to boost domestic spending and cushion the economic blow of the US tariffs.
Common use food and beverages ranging from butter and ghee to dry nuts, condensed milk, cheese, figs, dates, avocados, citrus fruits, sausages and meat, sugar boiled confectionery, jam and fruit jellies, tender coconut water, namkeen, drinking water packed in 20-litre bottles, fruit pulp or fruit juice, beverages containing milk, ice cream, pastry and biscuits, corn flakes and cereals, and sugar confectionery are likely to see a tax rate cut to 5 per cent from the current 12 per cent or 18 per cent.
Consumer goods such as tooth powder, feeding bottles, tableware, kitchenware, umbrellas, utensils, bicycles, bamboo furniture and combs will see a rate cut from 12 per cent to 5 per cent. The same on shampoo, talcum powder, toothpaste, toothbrushes, face powder, soap and hair oil has been cut down to 5 per cent from 18 per cent.
Cement will cost less with the tax rate coming down from 28 per cent to 18 per cent.
"Some of the key sectors that stand to benefit from this are insurance, FMCG, automobiles, agriculture equipment, cement, consumer durables, apparel, footwear, QSR, and retail," Pranav Haridasan, MD and CEO of Axis Securities, said.
Hotel rooms with tariffs up to Rs 7,500 per day are set to become cheaper as they will attract a lower GST rate of 5 per cent, without input tax credit (ITC), from September 22, a move expected to boost tourism, hospitality industry players said on Thursday.
Currently, hotel rooms with a daily tariff of up to Rs 7,500 attract 12 per cent goods and services tax (GST) with input tax credit.
