Union Budget 2016-17: Impact on FMCG & Consumer Discretionary Sector

Excise on readymade garments with retail price of Rs1,000 or more raised to 2% without input tax credit or 12.5% with input tax credit.

Mar 01, 2016 08:03 IST India Infoline News Service


FMCG & Consumer Discretionary – Positive
Key Announcement Impact
Excise duties on various tobacco products other than beedi raised by about 10% to 15%. Negative for ITC, VST Industries, Godfrey Philips
Excise on readymade garments with retail price of Rs1,000 or more raised to 2% without input tax credit or 12.5% with input tax credit. Negative for Arvind, Madura Garments, Raymond.
Slightly positive for V-Mart
Rs9,000cr has been provided for Swachh Bharat Abhiyan. Positive: Cera Sanitaryware, HSIL
Cuts excise duty on rubber sheets for soles to 6% v/s 12.5%. Positive: BATA, Relaxo Footwear, Liberty Shoes
For the ‘first – home buyers’, deduction for additional interest of Rs50,000 per annum for loans up to Rs35 lakh sanctioned during the next financial year, provided the value of the house does not exceed Rs50 lakh. Marginally Positive: Greenply, Centuryply, Kajaria
Excise duty of 1% on Jewellery without input credit tax or 12.5% with input tax credit. Negative for all Jewellery companies
Higher Disposable Income
  • Raise the ceiling of tax rebate under section 87A from Rs2000 to Rs5000 to lessen tax burden on individuals with income upto Rs5 laks.
  • Benefit under section 80GG limit extended from Rs24,000 to Rs60,000pa for people not having their own house nor receiving any HRA.
Positive for the overall industry
Increase in outlay to Rural schemes and social infrastructure (Rs15,000cr interest subvention to farmers and Rs38,500cr allocation to MNREGA). Positive for the overall industry
Krishi Kalyan Cess, @0.5%. Negative for Companies
 
 

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