Benchmarks trade in fine fettle in early deals; Sensex surpasses 33,300 mark

Indian equity benchmarks have made an optimistic start and are trading in fine fettle in early deals on Monday, hitting fresh record highs with frontline gauges surpassing their crucial 33,300 (Sensex) and 10,350 (Nifty) levels. Traders reacted positively to the meeting outcome of the ministerial panel working to make GST composition scheme more attractive, which suggested slashing tax rate to 1 per cent for manufacturers and restaurants, while easier norms for traders opting for it. Meanwhile, traders will also be eyeing the urgent meeting of the ministry of corporate affairs to discuss if there are 'grey areas' in the Companies Act that needs to be addressed, after several directors went to courts against their debarment by the government.

Global cues too remained supportive with Asian counters trading in green at this point of time, following Wall Street close at fresh record highs on Friday. Though, the Chinese market was cautious despite its industrial profit growth accelerating further in September. The US markets moved higher in the last session and the tech-heavy Nasdaq and the S&P 500 climbed to new record closing highs.

Back home, auto stocks remained in top gear, as the Union road transport ministry has approved the timeline for the implementation of system which requires all cars manufactured after July 1, 2019, to be equipped with airbags, seat-belt reminders, alert systems for speeds beyond 80kmph, reverse parking alerts, as well as manual override over the central locking system for emergencies.

The BSE Sensex is currently trading at 33325.09, up by 167.87 points or 0.51% after trading in a range of 33206.93 and 33332.06. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.02%, while Small cap index was up by 1.08%.

The top gaining sectoral indices on the BSE were PSU up by 1.81%, Oil & Gas up by 1.65%, Consumer Durables up by 1.40%, Telecom up by 1.35% and Energy was up by 1.31%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were ONGC up by 3.05%, SBI up by 2.59%, Maruti Suzuki up by 1.79%, Tata Motors - DVR up by 1.20% and Bharti Airtel up by 1.04%. On the flip side, Coal India down by 1.27%, Dr. Reddys Lab down by 1.08%, Kotak Mahindra Bank down by 0.90%, Cipla down by 0.82% and Wipro down by 0.68% were the top losers.

Meanwhile, the ministerial panel working to make Goods and Services Tax (GST) composition scheme more attractive, has suggested lowering tax rates for manufacturers and restaurants under the plan to 1 percent. At present, manufacturers pay GST at 2 percent, the rate for restaurants is 5 percent and traders pay 1 percent. The Group of Ministers (GoM) headed by Assam Finance Minister Himanta Biswa Sarma also suggested doing away with the tax rate distinction between AC and non-AC restaurants, those which are not covered under composition scheme, and tax them at 12 percent.

The GoM recommended that hotels which has room tariff of more than Rs 7,500 should attract 18 percent tax rate. For traders, it suggested two-pronged approach for taxation under the scheme. It said that traders who want to exclude the sale proceeds of tax-free items from its turnover, it can pay 1 percent GST. However, those traders who pay tax on total turnover, the tax rate has been proposed at 0.5 percent.

Composition scheme is open for manufacturers, restaurants and traders whose turnover does not exceed Rs 1 crore. This threshold was earlier Rs 75 lakh and the GST Council earlier this month raised it to Rs 1 crore from October 1. The panel has suggested allowing businesses who are engaged in inter-state sale to avail the composition scheme.

Under the new indirect tax regime, around 15 lakh businesses opted for composition scheme, which allows them to pay taxes at a concessional rate and makes compliance easy. While a regular taxpayer has to pay taxes on a monthly basis, a composition supplier is required to file only one return and pay taxes on a quarterly basis. Also, a composition taxpayer is not required to keep detailed records that a normal taxpayer is supposed to maintain. It also suggested that manufacturers engaged in job works can be allowed to opt for composition scheme.

The CNX Nifty is currently trading at 10381.50, up by 58.45 points or 0.57% after trading in a range of 10344.30 and 10383.75. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.04%, SBI up by 2.97%, ONGC up by 2.80%, Bharti Infratel up by 2.41% and Yes Bank up by 2.07%. On the flip side, Indiabulls Housing down by 1.67%, Cipla down by 1.26%, Wipro down by 1.01%, Dr. Reddys Lab down by 0.75% and Coal India down by 0.74% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI gained 2.5 points or 0.14% to 1,748.63, KOSPI Index increased 5.37 points or 0.22% to 2,502.00, Hang Seng rose 13.37 points or 0.05% to 28,452.22, Jakarta Composite jumped 26 points or 0.44% to 6,001.28 and Taiwan Weighted added 59.22 points or 0.55% to 10,768.33.

On the flip side, Nikkei 225 decreased 38.62 points or 0.18% to 21,969.83 and Shanghai Composite was down by 24.78 points or 0.73% to 3,392.03.