Shares of textile and footwear companies were sharply higher in early trade on August 29, in anticipation of benefits from the proposed GST rate rationalisation, which will be taken up by the GST Council next week.
News reports suggest that the Group of Ministers (GoM) on rate rationalisation may propose to the council to reduce GST on textile products such as glimped yarn, metallised yarn and rubber thread to 5 percent from the current 12 percent.
The panel is also expected to recommend raising the price threshold for readymade garments attracting 5 percent GST to Rs 2,500 from Rs 1,000. Garments priced above Rs 2,500 could attract 18 percent GST compared to 12 percent at present, CNBC-TV18 reported citing people familiar with the developments.
For footwear, GST on items priced above Rs 2,500 is likely to be increased to 18 percent from 12 percent.
Anticipating these changes, shares of Trent were higher by over 3 percent, making it one of the top gainers on the Nifty 50 index. Siyaram Silk Mills gained 3.55 percent to touch an intraday high of Rs 630 on expectations of higher sales following a lower GST slab.
Indiamart Intermesh and Avenue Supermarts also saw buying interest, rising up to a percent intraday.
Among footwear stocks, Relaxo Footwears surged 9.34 percent while Khadim India advanced more than 10 percent.
The buying comes amid recent declines in textile and leather shares following the imposition of a steep 50 percent tariff on Indian goods entering the United States.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
