After opening the day flat, share markets in India continued to witness selling pressure and are currently trading in red. Sectoral indices are trading on a mixed note with stocks in the metals sector and stocks in the banking sector trading in the green, while stocks in the auto sector and stocks in the IT sector are leading the losses.
The BSE Sensex is trading down by 110 points (down 0.3%), and the NSE Nifty is trading lower by 25 points (down 0.3%). Meanwhile, the BSE Mid Cap index is trading down by 0.4%, while the BSE Small Cap index is trading down by 0.2%. The rupee is trading at 64.04 to the US$.
In news from the Goods and Service Tax (GST) space. According to a leading financial daily, the government is all set to bring in an ordinance as early as next week, 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 ordinance seeks to restore tax revenue from the automobile industry that unintentionally got affected in the transition to the new indirect tax regime.
The finance ministry on 7 August said the Council chaired by finance minister Arun Jaitley had recommended to the central government to move legislative amendments needed for raising the maximum ceiling of cess that can be levied on motor vehicles including sports utility vehicles (SUVs) to 25% from the present 15%.
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 demonetisation 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.
