After opening the day flat, share markets in India witnessed volatile trading activity and are currently trading in marginally above the dotted line. Sectoral indices are trading on a mixed note with stocks in the power sector and stocks in the energy sector trading in green, while stocks in the telecom sector and stocks in the IT sector are leading the losses.
The BSE Sensex is trading up by 31 points (up 0.1%), and the NSE Nifty is trading up by 13 points (up 0.1%). Meanwhile, the BSE Mid Cap index is trading up by 0.2%, while the BSE Small Cap index is trading up by 0.5%. The rupee is trading at 64.01 to the US$.
In news from the Goods and Service Tax (GST) space. The government approved an ordinance to increase ceiling on cess to 25% from the present 15% over the peak rate of 28% GST on luxury cars and sports utility vehicles (SUVs).
The exact quantum of the increase and its timing will be decided by the GST Council.
The ordinance seeks to restore tax revenue from the automobile industry that unintentionally got affected in the transition to the new indirect tax regime.
Makers of SUVs and luxury cars have criticized the GST Council’s plan to raise the cess, warning the move will lead to production cuts and job losses and dent the “Make in India” initiative.
The decision has upset the growth plans of the luxury car industry, which had seen a flat performance in 2016, owing to demonetization and the ban on 2,000cc diesel cars in the National Capital Region for the first eight months of the year.
The decision to increase the cess was taken after the Council found the taxes on these cars were lower under the GST regime than the indirect taxation system.
Prices of most such vehicles had turned significantly cheaper in most states following the introduction of the GST on July 1. However, uncertainties over GST implementation pulled down sales of passenger vehicles (cars, utility vehicles, and vans) in June.
