GST: Berger Paints, Kansai Nerolac To Reduce Prices After Rate Cut
Paintmakers said they will pass on the entire benefit to consumers after the Goods and Services Tax Council lowered the rate.
“This is a bold step taken by the government,” H M Bharuka, managing director of Kansai Nerolac Ltd. told BloombergQuint. “We were contemplating on taking price hikes as raw materials costs are increasing. But now we will support the government and will drop prices by 10 percent.”
The rate on decorative paints was lowered from 28 percent to 18 percent on Saturday by the GST Council. They are among more than 50 goods, including washing machines and refrigerators, for which rates have been lowered effective July 27.
The rate cut is expected to boost growth, according to Berger Paints Ltd. The average growth rate for the sector is expected to increase by 5-6 percent from 10 percent now, Abhijit Roy, managing director and chief executive officer at Berger Paints, said. “We will reduce prices of our paints by 10 percent.”
Shares of Asian Paints Ltd., India’s largest paintmaker, were trading 0.9 percent higher at 12:45 p.m., Kansai Nerolac was up 1.5 percent and Berger Paints was flat compared with a 0.2 percent rise in Nifty 50.