Sectors which will be pinched by GST

The GST is a transforming reform which will bring benefit to many but will be loss making to some sectors. However what the GST will rightly do is it will lower the burden of indirect tax on the goods, which accounts to nearly 25 to 30 per cent. On the contrary it also bolsters one tax one nation slogan of the centre. GST certainly will avoid cascading and double taxation issue but here are some major sectors which will cry foul on GST reform.

Telecom, Information Technology, Banks, Consumer Discretionary will have a negative impact of GST. If we assume that the GST will be capped at 18 per cent, the sectors mentioned above do not pay taxes more than 15 per cent currently. Therefore, in the new regime they will end up paying more.

On Aug 4, Jubilant Foodworks which is operational in Consumer Discretionary as at 10.02 am is down by 3 per cent and is trading at Rs 1171.30. Bharti Airtel representing the telecom sector is down by 0.24 per cent. Infosys is down by 0.49 per cent, IndusInd Bank which is trading at Rs 1169 is marginally down by 0.70 per cent. On the other hand, the Pharma sector is neutral in this scenario. Real Estate sector also is not majorly impacted by passing of the GST.
Pharma index is green and the major gainers are Cadila Healthcare, which has gained by 4 per cent; and Aurobindo Pharma which is marginally up by 1.21 per cent. The Realty sector indices are too in the green. Unitech has gained by 1.89 per cent and DLF has gained 0.65 per cent.