Assembly election results 2016 in the five states — Assam, West Bengal, Tamil Nadu, Puducherry and Kerala — once again spurred hopes of early passage of GST Bill
Assembly poll results in the five states — Assam, West Bengal, Tamil Nadu, Puducherry and Kerala — once again spurred hopes of early passage of GST Bill as government may find it easier now to deal with Trinamool Congress and AIADMK in the Rajya Sabha.
West Bengal Chief Minister Mamata Banerjee after winning the assembly elections said, “We have ideological differences with BJP but we will always support on issues that are beneficial to the people. We will support GST.”
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GST aims to simplify the current indirect tax regime by bringing all central and state levies (like excise duty, sales tax, octroi, VAT and other countervailing duties) under one single head having uniform tax rate across goods and services (with some exclusions like electricity, alcohol and petroleum products).
“Results of the Assembly Elections in key states, including Tamil Nadu, West Bengal, Assam and Kerala, have strengthened Prime Minister Narendra Modi who will now be able to speed up economic reforms with help of non-Congress friendly parties like AIADMK and even Trinamool Congress,” Assocham President Sunil Kanoria told PTI.
According to market experts, passage of GST Bill will help several sectors. The benefits of GST are immense in terms of reducing economic distortions, creating a nationwide single tax market, widening of tax base and eliminating cascading of taxes (tax on tax).
On Dalal Street, shares of logistics companies extended gains on Friday on expectations that the state elections will boost chances of the passage of key Goods and Services Tax (GST) Bill. Gati was trading over 6 per cent higher at Rs 132.75 (at 12.04 pm). Allcargo Logistics shares were trading nearly 4 per cent up at the same time.
With Thursday’s Assembly election results, Finance Minister Arun Jaitley also expressed the hope for early passage of GST Bill about which he was “reasonably optimistic”.
According to market experts, GST will benefit companies from logistics sector as well as manufacturing companies.
Chandan Taparia, analyst, Anand Rathi Securities said, “Passage of GST will mainly benefit companies like Gati, VRL Logistics, Allcargo Logistics, Snowman Logistics and companies from manufacturing sector.”
According to Angel Broking, the GST Bill has been facing hurdles in various sections of the Parliament for quite a while now and its implementation has been long delayed. However, now there is a strong likelihood of the bill getting passed and it would be the next big thing for the Indian economy.
The brokerage house said, “Once enacted, the GST would be positive for the economy and the stock market as a whole and specifically for sectors like logistics, E-commerce, automobile, and FMCG amongst others. The GST will reduce paperwork and enable efficient trade across the country. Stocks like Transport Corporation of India, Bajaj Auto, Hero MotoCorp, Maruti Suzuki India, TVS Motor, Dabur, HUL, Emami and Marico are some of the stocks which will gain with the passage of GST.”