Apparel, footwear, and retail counters rallied upto 7% in today's trading session on the back of GST cut booster. 

The GST Council decided to cut GST on apparel and footwear priced up to ₹2,500 to 5%. Earlier, only garments priced below ₹1,000 were taxed at 5%, while those above were taxed a 12%. In contrast, the Council raised the rate on apparel and accessories costing more than ₹2,500, moving them from the 12% slab to 18%.

Amidst this, shares of companies such as Aditya Birla Fashion and Retail, Shoppers Stop, Vishal Mega Mart, and Trent advanced by as much as 4% during intraday. Aditya Birla Fashion and Retail, which includes brands like Louis Philippe, Van Heusen, Allen Solly and Peter England, along with Pantaloons, saw a rise of nearly 4%, recording a day’s high of 85.60. 

Shoppers Stop’s share rose by 2%, at Rs 554.15. Visha Mega Mart too increased by 3%, while Trent recorded a 3% jump, with shares trading at Rs 5,674 apiece. Footwear giant Bata saw the steepest rise of 6.80%, trading at 1,241.50 apiece.

On the other hand, both Sensex and Nifty were off the day’s high, with the BSE index settling at 80.747, and the NSE index at 24,738.70, up by only 0.10%.

As per a Motilal Oswal Financial Services report, the simplification of the GST structure should not be seen just as ‘tax reform’ but more as ‘growth reform’. “As the Prime Minister has indicated, there will be further reform measures across multiple domains, intended to unleash the animal spirits of the economy, providing a shield against the global geopolitical headwinds,” the report stated.

The government is clearly in overdrive to lift and stimulate the domestic economy, and the latest announcements on GST, once implemented, will be the first big structural reform of the government in the current term. “In our view, this will also kickstart a cycle of positive uptrends for the Indian equity market, which has been a key underperformer over the past year,” the report suggested.