New Delhi: The GST rate revamp is set to boost consumption, and the new GST rates are set to increase the disposable income of the general populace. Commenting on the latest development that has happened in GST rates, Bernstein, a wealth management firm, said there will be 5 key sectors that are set to see maximum impact.
It listed 5 key sectors, viz., FMCG, quick commerce, QSR (quick service delivery), apparel, and footwear, that are set to get the benefit of GST rate reduction the most. From QSR firms to grocery retailers and apparel and footwear companies, the new GST rates are set to expand the horizon of consumption.
FMCG & QSR: Big Winners in GST Rate Revamp
Berstein, in its report, highlighted that the government decision to cut rates on personal care and home care products such as soaps, shampoo, hair oil, powders, and toothpaste to 5 percent from 18 percent or 12 percent is expected to boost buying in the FMCG sector.
Further QSR platforms are set to benefit, as per Bernstein. Grocery retailers, along with quick commerce platforms are set to benefit the most regarding the GST restructuring.
The GST rate restructuring on apparel and footwear is set to see mixed impact, as GST for apparel ranging between Rs 1000 and Rs 2500 is now set to attract 5 percent GST, down from 12 percent. However, apparel items ranging above Rs 2500 will be attracting a tax rate at 18 percent which is higher than the erstwhile 12 percent.
On the footwear front, the shift is acute. Products ranging below Rs 1000 and those in the Rs 1000-2500 range will now be set to face just 5 percent GST. Footwear costing above Rs 2500 remains at 18 percent.