GST Rate Rationalisation: Here’s a Look at What Analysts Are Expecting?
The reforms in the Goods and Services tax are in the making and brokerages are expecting positive cues in the market.
GST Rate Rationalisation: Here’s a Look at What Analysts Are Expecting?
The reforms in the Goods and Services tax are in the making and brokerages are expecting positive cues in the market.
Brokerages, including Jefferies and Morgan Stanley believe that rationalisation of tax slabs could instill growth in the market. Though a reduction in taxing of consumer durables and other goods can boost consumption, the timing and extent of these cuts remain uncertain.
What did Jefferies say?
According to Jefferies, it expected major developments in Q4FY25 on the back of changes in GST reforms.
It expected that GST on cement, two-wheelers, and air conditioners could be reduced to 18% from the current 28%. Rate reductions are also expected across processed foods, footwear, and garments, though passenger cars.
Jefferies believes that this tax cut could boost consumption and help reignite a slowing economy.
What did Morgan Stanley say?
Morgan Stanley believes that GST cuts could drive a "virtuous upcycle," like the excise duty cuts in 2008. The firm expects that a fall in vehicle prices due to tax cuts would make the car more affordable for the masses.
Morgan Stanley is betting high on Maruti Suzuki India, Mahindra & Mahindra, Ashok Leyland, and TVS Motor.
