FMCG SECTOR The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. As per the Pre GST regime , FMCG has to pay many taxes like VAT, Service Tax, Excise Duty, Central Sales tax. After GST law implemented it covers all the above tax one single point of the tax in form of GST. GST has been listed under the 4 broad categories. (5%,12%,18%,28% etc). ITEMS POST GST RATE (%) PRE GST RATE(%) CHANGES(%) Aluminum Foil 18 28 -10 Agarbatti 5 Preserved Vegetables Butter, ghee, cheese 12 6 Dry fruits

CONT . . . ITEMS POST GST RATE (%) PRE GST RATE(%) CHANGES(%) Jams, jellies 18 12 6 Frozen meal Branded paneer 5 Branded cereals Cocoa butter, oils chocolates 28 26 2 Instant, aroma coffee Coffee concentrates, custard powder Protein concentrates, sugar syrups Razors

CONT . . . ITEMS POST GST RATE (%) PRE GST RATE(%) CHANGES(%) Dental floss 28 26 2 Toothpaste 18 24-26 Deodorants Aftershave Shaving cream Cereals Puffed, rice, papad, bread Exempt - Aquatic/poultry/cattle feed  - Salt Soyabean, groundnut, sunflower, seeds 5 6 -1

CONT . . . ITEMS POST GST RATE (%) PRE GST RATE(%) CHANGES(%) Infant use preparations 18 19.5 -1.5 Pasta, corn flakes, and cakes Coffee, tea 5 6 -1 Frozen vegetables Condensed milk 18.5 -0.5 Toilet paper Hot water bottles Petroleum jelly, paraffin wax 20 -2 Pencil sharpeners, knives 12 -6.5

CONT . . . ITEMS POST GST RATE (%) PRE GST RATE(%) CHANGES(%) Meats & fish preparations 12 18.5 -6.5 Sweetmeats 5 -7 Bakery mixes, dough’s, pizza bread Vegetable fats & oils Tea concentrates, sauces, soups Ice cream, instant food mixes, sherbet 18 26 -8 Refined sugar Soap Hair oil

CONT . . . ITEMS POST GST RATE (%) PRE GST RATE(%) CHANGES(%) Handmade safety matches 5 18.5 -13.5 Broomsticks 18 -13 Candles 12 26 -14 Tooth powder Led lights Baby Foods Milk beverages Ready to eat namkeen/bhujiya Beet sugar, cane sugar -21

CONT . . . ITEMS POST GST RATE (%) PRE GST RATE(%) CHANGES(%) Cigarettes 28+cess Excise duty+ 26% VAT - Refrigerators 28 26 2 Manicure, pedicure sets Perfumes   Beauty or Make up Preparations Skincare items including sunscreen Shampoos, Hair Cream, Hair dyes Wigs, false beards, eyelashes The GST rate structure shows that not all FMCG companies stand to benefit from the new regime. Some companies may gain & some lose by their segment, means GST on FMCG sector marginally impacted to the company.

GST IMPACT ON FMCG SECTOR : Indian FMCG companies set up their warehouses in states like Himachal Pradesh/Uttaranchal  .After implantation of GST the effective tax rate has come down from 40% to 20%.They don’t have to pay central sales tax if they do a stock transfer to warehouses. Reduction in GST rate may reduce the prices of the product. Reduction of the prices will be improving the competition of product as well as in volume of sector & markets also go ahead. As consumption of people increase, ultimately GDP will rise. As an analyst we have a positive view on FMCG sector as a whole. Companies like HUL, Emami, Colgate palm, Britannia will be benefitted.

HUL HUL is the Indian wing of the Multinational consumer goods company lever International. HUL has a market cap of Rs.2,39,130.04Cr with traded at Rs.1104 as on 7th July 2017.Company has 4 segments like: Home care Personal care Foods Refreshment GST IMPACT ON HUL As the GST rate lower in soaps by 8% from 26% in pre GST as against 18% in post GST.

CONT . . . As the GST rate lower in soaps by 8% from 26% in pre GST as against 18% in post GST. Under Home care, The Company has slashed the price of its detergent soap Rin bar of 250 gm to Rs 15 from Rs 18 and increased weight (grammage) of its Surf Excel bar costing Rs 10 to 105 gm from 95 gm at the same price. Company & customer will get more benefit as per the new GST regime. In home care Segment Company will get mostly 4-5% benefit. Personal care includes personal wash, skin care & hair care. GST rate for products like hair oil, soaps and toothpaste has been lowered by 8% to 18% in post GST as against from 26% in pre GST. Company is also offering 33 per cent extra in Dove bathing bar.

CONT . . . The food processing industry such as jaggery, cereals and milk, being exempted from GST, is expected to be beneficial for the company. Sales volume on Tea & coffee may increase by 1-2% due to decrease in tax rates. Competition will improve in global market. HUL earned good profit today; lower prices could potentially support the volume growth of certain product particularly in rural segment.