Logistics stocks bleed after first day of big GST meet

The logistics stocks like Gati, Allcargo Logistics, VRL Logistics and Sical Logistics dropped 5.72 per cent,5.61 per cent, 3.34 per cent and 4.14 per cent, respectively, on bourses after GST comment from Union Finance Minister Arun Jaitley.  The majority of the companies from logistics sector will be impacted after clearance of GST. There was no concrete development on the GST clearance end, therefore logistics stocks are bleeding on Dalal Street.

The two-day meeting of the committee on Goods and Services Tax (GST) consisting of the Finance Ministers of all the states commenced on Tuesday in the presence of FM. After the first day of meeting, FM said that all states except Tamil Nadu are backing the GST bill.

FM commented that central government is flexible related to 1 per cent tax on manufacturing states. The consensus for the relaxation of tax for manufacturing states is not included in the constitution. More clarity and discussions are needed on calculations of revenue neutral rate.

They discussed state and central powers on dual control and more discussions will be held in August 2016. There was discussion of share and funding of states’ revenue loss. FM also said that the government will try to implement GST by April 2017. But the GST bill has been pending in RajyaSabha. Once the constitution amendment bill to roll out GST is passed by the Parliament, the Centre and states will have to adopt their own laws to give effect to the new indirect tax regime.