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From Hair Oil to Cement, India Revamps Taxes: Winners and Losers

Bloomberg logoBloomberg 19-05-2017 Nupur Acharya and Bibhudatta Pradhan
A visitor poses for a photograph in a Mercedes Benz C-Class vehicle, manufactured by Daimler AG, during the 12th Auto Expo 2014 in Noida, India, on Friday, Feb. 7, 2014. The motor show opens to the public on Feb. 7 and runs through Feb. 11.: Inside India's 12th Auto Expo 2014 Motor Show © Bloomberg/Bloomberg Inside India's 12th Auto Expo 2014 Motor Show A fruit vendor waits for customers at a market stall in Ahmedabad, Gujarat, India, on Wednesday, Jan. 11, 2017. Hailed as one of biggest reforms in generations, the goods and services tax (GST) will replace a myriad of consumption and sales levies imposed by various states and is expected to boost competitiveness and investment.: 1495182038_FRUIT © Bloomberg/Bloomberg 1495182038_FRUIT

(Bloomberg) -- The wait is over: India has cleared the way for the biggest tax reform since independence in 1947.

The main beneficiaries of the new goods and services tax, due to be rolled out on July 1, include steelmakers and some consumer goods, though personal care items including sanitary ware will be taxed at the top rate, along with appliances such as air conditioners.

Here’s a look at the winners and losers:

Fast-Moving Consumer Goods

The sector is a clear winner. Consumer staples including milk, fruits and vegetables, grain and cereals have been exempted. Sugar, tea, coffee and edible oil will be taxed the lowest rate of 5 percent. Companies that may gain include Hindustan Unilever, Nestle India and Dabur India.

  • Personal-care items to be taxed at 28 percent, save for hair oil, soaps and toothpaste, which will attract an 18 percent levy. This would impact Colgate-Palmolive India, Godrej Consumer Products, Marico and Gillette India.
  • Smokers be warned: cigarettes will attract a tax of 5 percent on top of the peak GST rate of 28 percent. ITC, Godfrey Phillips and VST may pass on the higher costs.


Here the impact is likely to be marginal. Vehicles already attract different levies, which add up to 28 percent -- the peak GST rate fixed for the sector. Gains derived from a unified tax system may still be passed on to consumers, analysts say. Maruti Suzuki India, Tata Motors and Mahindra and Mahindra could benefit.

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Consumer Durables

Appliances such as air-conditioners, refrigerators and washing machines will attract the peak rate, which is slightly higher than the existing tax slab. Companies may increase prices to preserve margins, Nirmal Bang Equities said in a note. Whirlpool of India, Voltas and Havells India could be impacted.

Metals, Cement

A reduction in tax on coal and metal ore to 5 percent will cut input costs for steelmakers, benefiting companies including JSW Steel, Vedanta, Tata Steel and Hindalco Industries.

  • Cement makers including ACC and UltraTech Cement may increase prices to offset the impact of the peak rate, though a lower tax on coal is expected to cushion the blow.

Renewable Energy

A 5 percent tax rate on equipment like solar panels and wind turbines may help keep a lid on project costs for developers such as Inox Wind and Suzlon Energy.

To contact the reporters on this story: Nupur Acharya in Mumbai at, Bibhudatta Pradhan in New Delhi at

To contact the editors responsible for this story: Divya Balji at, Unni Krishnan at, Ravil Shirodkar, Will Davies

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