The Goods and Services Tax (GST) will subsume many taxes that are currently a manufacturers nightmare. It would ensure an almost single tax structure and estimates are that it could push the GDP up by at least 2 per cent.
Here are 8 Shares that would benefit if the GST is passed in the monsoon session of parliament.
The shares of Mangalam Timber shot up by 17 per cent on Monday. If GST is implemented the unorganised sector in the timber and ply business would come under the ambit of taxes, thus benefiting a company like Mangalam Timber, which could see margins improving.
The shares of Mangalam Timber last closed at Rs 34 on the BSE.
Godrej Consumer is the largest home grown FMCG company in the country. One of the huge costs that FMCG companies incur is with regards to warehousing costs. With the implementation of GST these companies are likely to benefit.
Taxes are also expected to lower with the implementation of the GST. The Godrej Consumer stock last closed at Rs 1586 on the NSE.
Inox Leisure runs several multiplexes across the country. Entertainment Tax is presently higher than the suggested GST rate of 18 per cent. Estimates suggest that the company could expand margins by at least 2 per cent, if GST is implemented.
The stock last closed at Rs 238.
Kansai Nerolac faces intense competition from the unorganised sector, where there are various benefits of saving tax.
Once the unorganised sector comes under GST they would have to pay tax, which could benefit a company like Kansai Nerolac.
The shares of Kansai Nerolac last closed at Rs 319.
Maruti is the largest manufacturer of small cars in the country. The current rate of taxes for small cars would come down, as the GST rate is unlikely to be 24 per cent, which is the tax rate for small cars at the moment.
If the GST tax rate is set at the proposed 18 per cent, a straight benefit of 6 per cent of taxes paid on small cars.
PVR Cinemas like Inox will benefit from lower taxes, as the entertainment tax is higher at the moment.
The stock of PVR last closed at Rs 1025.
The products manufactured by Havells like wires, cables etc, is heavily controlled by the unorganised sector. The GST would reduce the tax advantage enjoyed by these companies, thus boosting prospects for companies like Havells.
The stock last closed at Rs 358.
Hindustan Unilever is likely to gain from lower warehousing costs and lower tax rates.