Hotel, footwear stocks rise up to 3% as investors hope for GST relief

Hotel, footwear stocks rise

Shares of hotel and footwear companies surged on September 3 as investors pinned hopes that the GST Council may reduce tax levied on some services and items falling from these two categories.

The GST Council, chaired by Finance Minister Nirmala Sitharaman, is meeting in New Delhi on September 3-4 to deliberate on the Centre's proposal for a simplified rate structure of 5 percent and 18 percent.

For footwear, it is being reported that GST on items priced above Rs 2,500 is likely to be increased to 18 percent from 12 percent, however, items below Rs 2,500 may see GST reduced to 5 percent from the existing 12 percent.

Relaxo Footwears shares are higher by 3 percent while Campus Activewear shares are up nearly 1.5 percent. Khadim India shares gained more than a percent while Red Tape shares jumped around 2 percent.

Currently, GST rate on hotel rooms is fixed at 12 percent for room tariffs up to Rs 7,500 per night, and 18 percent for room tariffs exceeding Rs 7,500 per night. The GST Council is set to deliberate upon simplification of the tax structure, and removal of the 12 percent GST slab.

Hotel companies with room rates mostly below Rs 7,500 per night saw their shares rise sharply, ahead of the outcome of the GST meet outcome.

ITC Hotels shares jumped nearly 2 percent to trade at Rs 252 apiece, while Lemon Tree Hotels and Chalet Hotels shares rose more than 2 percent each. EIH and Samhi Hotels shares surged more than 3 percent each.

IHCL shares rose nearly 2 percent. Puneet Chhatwal, MD & CEO of Indian Hotels Company, told CNBC-TV18 recently that a revision in GST rates could be a major boost for the hospitality sector.

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