The 56th GST Council, on Wednesday (September 3), approved sweeping reforms to the indirect tax regime, introducing a two-rate structure of 5% and 18% along with a special 40% levy on tobacco, pan masala and other luxury goods.
The revised rates, part of the Centre’s “GST 2.0” framework, will come into effect from September 22. The Council also clarified it will not reconvene on Thursday, while extending the compensation cess till October 31.
The restructuring eliminates the existing 12% and 28% slabs, a move aimed at simplifying compliance and spurring consumption across sectors.
Here’s a list of sectors and market-listed firms that could see action on Thursday:
Fertiliser stocks
Fertiliser and agrochemical players such as UPL, PI Industries and Rallis India are expected to gain as GST on fertiliser acids and bio-pesticides is reduced to 5% from 12–18%.
Renewables stocks
The renewable energy sector also stands to benefit, with the tax on solar cookers, solar water systems and related parts slashed to 5% from 12%, supporting companies like Adani Green Energy, KPI Green Energy, Sterling & Wilson Renewable Energy and Tata Power.
Textile and Apparel stocks
In textiles, synthetic yarns, manmade fibres, carpets and rubber threads will see GST drop to 5% from 12%, while the threshold for garments taxed at 5% is proposed to rise from ₹1,000 to ₹2,500.
Apparel priced above ₹2,500 will move to the 18% slab from 12%. The changes could boost demand for players such as V-Mart, Vishal Mega Mart, Vardhman Textiles, Arvind, Raymond, Page Industries, and Welspun India.
Autos & Auto Components
GST on small cars, hybrids, and EV components has been cut from 28% to 18%, a move expected to shape demand patterns across vehicle categories and components. Key stocks in focus include Maruti Suzuki, Tata Motors, M&M and Hero MotoCorp.
Cement & Building Materials
With GST on cement reduced from 28% to 18%, construction and housing costs are set to ease, driving demand across infrastructure and real estate projects. Cement majors like UltraTech Cement, Shree Cement, Ambuja Cements, ACC, and Dalmia Bharat will be in focus.
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