Chapter 8. Effect of GST on Different Sectors and Industries

With the implementation of GST, it will turn India into unified market, which will be benefited to all kind of business leading Logistics companies, airline industry, telecom sector and so. Though some companies will have positive impact, on the other side, imposing GST will lead to negative impact on some companies. As of now, the rate of GST is yet to be decided, it can assume a 20% rate by government panel in decision making.


AUTOMOBILES As assumed GST rate near about 20%, which will lead to fall in prices say, about 10-15 %, which will result in positive demand for automobiles.

Positive impact on :  Maruti Suzuki, hero Crop, Eicher Motor, Mahindra & Mahindra

Negative impact : Ashok Leyland

FMCGIntroduction of GST, it will positively for household and personal care as it will reduce tax rate by 2%-5% excluding warehousing and logistical requirements.

Positive impact on : Hindustan Unilever, Emami, Godrej

Negative impact : Cigarette manufacturer, Titan, ITC

LOGISTICSGST is the tax that will eliminate central sales and inter state VAT which will lead to increase efficiency of warehousing and logistics chain.

Positive impact on : Corporation of India, Adani SEZ

INFRASTRUCTURELarsen & Toubro will be key beneficial for this sector as it will eliminate the difference between sales and services.
CONSUMER DURABLESVoltas, Havells, and other consumer durables will be benefit as it will be cost saving upto 2-3 % and will be passed on to end users
OIL & GASPetroleum Product like: Crude, Natural Gas, Diesel, etc. shows neutral impact as for now no clarity is there in roadmap as GST will follow Dual Mechanism concept.
CEMENTMost of the companies in this sector like : Ultratech, Ambuja Cement will have positive impact as current rate is about 27% and assumed GST rate is 20%, so overall tax could decline.
WIND POWERIntroducing GST, will show some negative impact on Wind Power Sector; Turbine Generator  as it will put pressure on some companies to lower their prices.
PHARMACEUTICALSCompanies like : Alkem, Glaxo Pharma and so, will have negative impact as it will likely to increase indirect tax and companies could increase by 60% and MRP by 4%, as current rate is around 15% and post GST, it will be 20%
TEXTILESAt present , this sector has been divided into 9 categories for the taxation purpose and tax rate is 4%-12% based on the categories.  So with GST, there will be no such categories and only one rate is applicable.
REAL ESTATE Real Estate sector will be seen positive as it will reduce the prices in properties. In current scenario, developers/ builders have to pay various taxes like custom, excise, entry tax, and so, and for the same customer has to pay service tax and VAT for the purchase of property. So  with GST, it will replace all the taxes.
HOTELSHotel Industry will show Neutral effect, as GST rate is 20% and  the service charge by this industry is 8% and luxury tax will be 10-12%, so it’s not majorly affected.