Navneet Education shares rise 2% on talk of GST rate rejig for stationery items

While Navneet Education is up 3 percent year-to-date, Doms Industries' shares have been on a tough run, down about 11 percent over the same period.

Shares of Navneet Education rose 2 percent to Rs 156 per share in morning trade on Friday, August 29, after CNBC TV-18 reported that the government is weighing significant changes to GST rates on stationery products. The other potential beneficiary, DOMS Industries, saw selling pressure and traded almost a percent lower in the morning.

A panel of ministers on rate rationalisation is expected to present proposals that could see taxes on several items either scrapped or sharply reduced, CNBC TV-18 reported, citing sources.

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According to the proposals, GST on erasers and exercise books may be cut to zero. At the same time, rates on pencils, crayons, sharpeners, maps, atlases and related items could also drop to nil from the current 12 percent. Taxes on products such as mathematical and geometry boxes, as well as colour boxes, may be lowered to 5 percent.

It is essential to note that these are preliminary suggestions, and the final decision will be made by the GST Council when it convenes in New Delhi on September 3–4.

Also read: What to watch for in Reliance Industries’ 48th AGM?

Doms Industries, which makes pencils, drawing books, mathematical sets and a wide range of writing and colouring products, and Navneet Education, a publisher and supplier of educational books and stationery, are seen as direct beneficiaries if the proposals are cleared.

At about 9:50 am, shares of Navneet Education were trading at Rs 154, higher by 1.2 percent. While DOMS Industries shares were down over a percent at Rs 2,427. While Navneet is up 3 percent year-to-date, Doms Industries' shares have been on a tough run, down about 11 percent over the same period.

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