Colgate, ITC Share Price: FMCG Stocks Rally As GST Council Proposes Easing Input Tax Credit Rules

Colgate, ITC Share Price: Shares of fast-moving consumer goods (FMCG) companies rallied on October 9, 2026, after the Goods and Services Tax (GST) Council recommended easing input tax credit (ITC) restrictions on expenses such as free samples and certain goods written off after expiry.

The Nifty FMCG index gained as much as 2.55 per cent during the session. Colgate-Palmolive India was the top gainer in the pack, rising 5.20 per cent, as of 2:36 PM. ITC Ltd advanced 4.41 per cent, while alco-bev spirits producers United Spirits and Radico Khaitan climbed in the 3-3.50 per cent range.

Following these, Dabur India, Godfrey Phillips, Nestle and Britannia advanced 2 per cent and 3 per cent. Varun Beverages, Marico, hindustan Unilever, Patanjali, United Breweries, and Tata Consumer Products were also in green. Only Godrej Consumer Products was in red.

Why Are FMCG Stocks Rising

The GST Council's recommendation to ease ITC rules is one of the key reasons behind the rise in FMCG stocks on October 9.

At its 57th meeting, the Council proposed changes to Section 17(5) of the Central Goods and Services Tax Act, 2017, which would allow businesses to claim credit on some expenses that are currently restricted.

These include free samples, outdoor catering, health and life insurance, and certain telecom towers and pipelines laid outside factory premises. The proposal also covers goods destroyed or written off after expiry of their shelf life where destruction is required by law.

FMCG companies are likely to benefit from the proposed changes on free samples and expired stock. ITC allows businesses to set off GST paid on eligible purchases and expenses against the tax they owe. When credit is not allowed, the tax paid on those expenses becomes an additional cost.

If the proposed changes take effect, companies could recover more of this tax, potentially lowering costs and easing pressure on working capital. The actual benefit will depend on each company's expenses and the credit it qualifies for.

The rally also comes amid a recovery in the broader market after Indian equities fell for eight consecutive sessions. The Nifty 50 was up around 335 points or 1.50 per cent to quote above the 22,560 level. The broader Nifty 500, which represents more than 92 per cent of the free-float market cap of all NSE-listed companies, also gained nearly 1.30 per cent.

GST Council Proposes Faster Refunds

The GST Council has recommended changes to speed up refunds and reduce the need for manual processing.

Under the proposal, refunds of excess money lying in electronic cash ledgers would be processed automatically. The time limit for issuing an acknowledgement or deficiency memo would also be cut from 15 days to 10 days.

Businesses claiming refunds on zero-rated supplies or under the inverted duty structure mechanism could receive 90 per cent of the claimed amount provisionally through an automated system, subject to risk assessment.

The Council has also proposed widening the scope of refunds for accumulated ITC on certain input services and capital goods. Eligible input-service credit under the inverted duty structure mechanism would qualify for refunds from November 1, 2026. The proposed changes for capital-goods credit would apply from April 1, 2027, with refunds spread over 60 months.