Key benchmark indices could rise today, 22 December 2014, tracking firm Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could rise 37 points at the opening bell.
The government on Friday, 19 December 2014, introduced the Constitution Amendment Bill on Goods and Services Tax (GST) in Lok Sabha. GST will simplify and harmonise the indirect tax regime in the country. GST will broaden the tax base, and result in better tax compliance due to a robust IT infrastructure. Due to the seamless transfer of input tax credit from one state to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders. It is thus, expected that introduction of GST will foster a common and seamless Indian market and contribute significantly to the growth of the economy, the finance ministry said in a statement. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the State level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
All goods and services, except alcoholic liquor for human consumption, will be brought under the purview of GST. Petroleum and petroleum products have also been constitutionally brought under GST. However, it has also been provided that petroleum and petroleum products will not be subject to the levy of GST till notified at a future date on the recommendation of the GST Council. The present taxes levied by the States and the Centre on petroleum and petroleum products, i.e., Sales Tax/VAT, CST and Excise duty only, will continue to be levied in the interim period.
Both Centre and States will simultaneously levy GST across the value chain. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State. The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services. There will be seamless flow of input tax credit from one State to another. Proceeds of IGST will be apportioned among the States. GST is a destination-based tax. All SGST on the final product will ordinarily accrue to the consuming State. GST rates will be uniform across the country. However, to give some fiscal autonomy to the States and Centre, there will a provision of a narrow tax band over and above the floor rates of CGST and SGST.
There will be a non-vatable additional tax of not more than 1% on supply of goods in the course of inter-State trade or commerce. This tax will be for a period not exceeding 2 years, or further such period as recommended by the GST Council. This additional tax on supply of goods shall be assigned to the States from where such supplies originate, the finance ministry said.
A new Article 279A is proposed for the creation of a GST Council which will be a joint forum of the Centre and the States. This Council would function under the Chairmanship of the Union Finance Minister and will have Ministers in charge of Finance/Taxation or Minister nominated by each of the States & UTs with Legislatures, as members. The Council will make recommendations to the Union and the States on important issues like tax rates, exemptions, threshold limits, dispute resolution modalities etc.
The Centre will compensate States for loss of revenue arising on account of implementation of the GST for a period up to five years. A provision in this regard has been made in the Amendment Bill. The compensation will be on a tapering basis, i.e., 100% for first three years, 75% in the fourth year and 50% in the fifth year.
Shares of liquor makers will be in focus as the government has kept alcoholic liquor for human consumption out of the purview of the proposed Goods and Services Tax (GST). The government on Friday, 19 December 2014, introduced the Constitution Amendment Bill on Goods and Services Tax (GST) in Lok Sabha.
Shares of crude oil refiners will be in focus as the government has brought petroleum and petroleum products under the purview of the proposed Goods and Services Tax (GST). The government on Friday, 19 December 2014, introduced the Constitution Amendment Bill on Goods and Services Tax (GST) in Lok Sabha. Although petroleum and petroleum products have been brought under the purview of GST, it has been decided that petroleum and petroleum products will not be subject to the levy of GST till notified at a future date on the recommendation of the GST Council. The present taxes levied by the States and the Centre on petroleum and petroleum products, i.e., Sales Tax/VAT, CST and Excise duty only, will continue to be levied in the interim period.
Shares of insurance companies will be in focus after Finance Minister Arun Jaitley on Saturday, 20 December 2014, said that the government will not countenance attempts to delay or obstruct reforms of the nature of opening the insurance sector to foreign direct investment (FDI) even as political obstructionists are out to ensure that the issue does not come to the debating table of Parliament. Addressing captains of trade and industry while inaugurating FICCI's 87th Annual General Meeting in New Delhi, Jaitley said that overseas investors have waited and watched for over a decade and are confounded by the fact that a country committed to reform has not been able to reform the insurance sector. That is the challenge, he said and questioned, Can we allow this to continue?.
Consideration and passing of the Insurance Laws (Amendment) Bill, pending since 2008 in the Rajya Sabha has been held up on account of the prevailing stalemate in the Rajya Sabha. The winter session of the parliament concludes on Tuesday, 23 December 2014. It may be recalled that the Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
Tata Power Company announced before trading hours today, 22 December 2014, that that a technical snag developed in Unit No.7 at Trombay Thermal Power Generating Station. The gas turbine generator rotor of the Combined Cycle Gas based unit developed an inter-turn short and ground. However, there is no associated damage to any other equipment. The exact extent of the fault / repair and schedule required would be known once the rotor end rings are dismantled and fault / damage is closely examined.
Shares of state-run MOIL will be in focus after the Department of Disinvestment issued a newspaper advertisement for appointment of merchant bankers for divesting 10% stake in MOIL. The government intends to divest 10% stake in MOIL during the current fiscal year through the Offer for Sale route via the stock exchanges mechanism. The government currently holds 71.57% stake in MOIL.
Bajaj Auto said that the company through its distributor David Pieris Motor Company in Sri Lanka had secured, after a detailed evaluation process by the Government of Sri Lanka, an Order from them for supply of approx. 50,000 (numbers) Discover-125M motorcycles. The company has already supplied 48,000 (numbers) successfully against this Order. The company has now secured a repeat order from them through the company's Distributor in Sri Lanka for the supply of 1.25 lakh (numbers) Discover-125M, which the company expects to execute in next 3-4 months, Bajaj Auto said.
The Foreign Investment Promotion Board has reportedly cleared HDFC Bank's proposal to raise Rs 10000 crore, ending months of struggle by the private sector bank to enhance its capital base. Shareholders in May 2014 allowed the lender to raise Rs 10000 crore through routes that may include public or private placement as well as domestic or international markets. The proposal will now go to the Cabinet Committee on Economic Affairs that vets all foreign investment proposals in excess of Rs 1200 crore.
Crompton Greaves (CG) was awarded a contract from the Belgian offshore wind farm operator Northwind to provide operation and maintenance services for the 216 megawatt (MW) wind farm offshore substation on the Lodewijk bank, 40 km off the Belgian coast. This order follows a previous contract won by CG at the Northwind offshore wind farm for the grid connection study and supply of a 275 MVA main transformer and two reactors of 65 MVA.
CG will provide complete end-to-end services in order to effectively monitor, maintain and repair the offshore substation and ensure optimal availability and safety for ten years. The remote surveillance and monitoring service operated by CG will include power adjustments and will secure the operation of the Northwind installations on a 24x7 basis. In addition, CG will also provide preventive and corrective maintenance through its dedicated offshore specialised service team.
Alstom's Extraordinary Shareholders' Meeting, convened on 19 December 2014, approved the transaction to sell Alstom's Energy businesses to General Electric. This meeting gathered shareholders holding 64.25% of the total number of shares and voting rights. The resolution relating to this transaction was approved by a majority of 99.187%.
On the political front, media reports suggested that Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) will not win enough seats to form a government in Jammu and Kashmir, two exit polls showed on Saturday, 20 December 2014, dampening its hopes of taking control of the state for the first time.
Coming back to equity market, mirroring gains in global stocks, key equity benchmark indices edged higher on Friday, 19 December 2014. The S&P BSE Sensex rose 245.27 points or 0.9% to settle at 27,371.84, its highest closing level since 11 December 2014. The CNX Nifty gained 65.90 points or 0.81% to settle at 8,225.20, its highest closing level since 11 December 2014.
Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 668.85 crore Friday, 19 December 2014, as per provisional data.
Asian markets were trading higher in early trade today, 22 December 2014, tracking gains in the US market last week. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Taiwan, South Korea and Singapore were up by 0.22% to 1.36%.
On Friday, 19 December 2014, US stocks ended higher and the S&P 500 came within a few points of its closing record high. The S&P 500 index had climbed over the previous two sessions, spurred by the US Federal Reserve's commitment to take a "patient" approach toward raising interest rates, while signaling it was on track to boost rates in 2015. That provided clarity and relief to investors over the policy outlook.
In Europe, worries emerged that the European Central Bank's money-printing plans could come with a number of restrictive strings attached, media reported.
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