Firm trade continues over Dalal Street

Firm trade continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading in green, supported by positive cues from other Asian markets along with buying at Telecom and Oil & Gas counters. Traders remained positive, as Vice President Jagdeep Dhankhar said India will go past Japan and Germany to become the third largest economy in the world by 2030. The vice president said India was among the 'Fragile Five' two decades back, but it has now become the fifth-largest economy in the world. However, upside remained capped, as S&P Global said that India's public finances are unlikely to improve materially in the next two or three years compared to where they stood before the coronavirus outbreak.

On the global front, Asian markets were trading mostly in green, even after overall inflation in the Tokyo region of Japan was up 3.3 percent on year in October. That exceeded expectations for an increase of 3.1 percent and was up from 2.8 percent in September. Core CPI, which excludes volatile food prices, added an annual 2.7 percent - again exceeding forecasts for an increase of 2.5 percent, which would have been unchanged.

The BSE Sensex is currently trading at 63997.96, up by 215.16 points or 0.34% after trading in a range of 63431.45 and 64080.97. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.07%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were Telecom up by 1.64%, Oil & Gas up by 1.41%, Energy up by 1.37%, Realty up by 0.93% and Basic Materials up by 0.30%, while Auto down by 0.97%, Consumer Durables down by 0.92%, Consumer discretionary down by 0.31%, Utilities down by 0.28% and FMCG down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.31%, Bharti Airtel up by 1.63%, Ultratech Cement up by 1.55%, Indusind Bank up by 1.32% and HDFC Bank up by 1.11%. On the flip side, Tata Motors down by 1.96%, Maruti Suzuki down by 1.44%, Axis Bank down by 1.18%, Mahindra & Mahindra down by 1.12% and NTPC down by 1.04% were the top losers.

Meanwhile, the central government has asked states that they have no power to impose any tax or duty on electricity generated from any source - coal, hydro, wind or solar and any such levy is illegal and unconstitutional. In a circular, the Union Ministry of Power, said it had come to the notice of the central government that some state governments had imposed additional charges on generation of electricity from various sources under the guise of development free/charges/fund. Such additional charges/fees in the form of any tax/duty on generation of electricity, which encopasses all types of generation viz thermal, hydro, wind, solar, nuclear etc is illegal and unconstitutional.

Clarifying on the constitutional position, the ministry said the powers to levy taxes/duties are specifically stated in the VII Schedule. List-II of the VII Schedule lists the powers of levying taxes/duties by the states in entries-45 to 63. No taxes/duties which have not been specifically mentioned in this list can be levied by the state governments under any guise whatsoever - as residuary powers are with the central government. Entry-53 of the List-II (State List) authorises the states to levy taxes on consumption or sale of electricity in its jurisdiction. This does not include the power to impose any tax or duty on the generation of electricity. This is because electricity generated within the territory of one state may be consumed in other states and no state has the power to levy taxes/duties on residents of other states.

The ministry went on to state that Article-286 of the Constitution explicitly prohibits states from imposing any taxes/duties on supply of goods or services or on both, where the supply takes place outside the state. Also, Articles-287 and 288 prohibit the imposition of taxes on consumption or sale of electricity consumed by the Central government or sold to the Central government for consumption by the government or its agencies. In light of the constitutional provisions, no taxes/duties can be levied by any state on generation or inter-state supply of electricity under the guise of additional charges/free on generation of electricity from any source - thermal, hydro or renewables.

The CNX Nifty is currently trading at 19101.50, up by 54.25 points or 0.28% after trading in a range of 18940.00 and 19130.05. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.37%, Reliance Industries up by 2.24%, Cipla up by 1.96%, Bharti Airtel up by 1.61% and Ultratech Cement up by 1.48%. On the flip side, Tata Motors down by 2.04%, Maruti Suzuki down by 1.60%, Axis Bank down by 1.33%, Mahindra & Mahindra down by 1.20% and NTPC down by 1.16% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted added 15.07 points or 0.09% to 16,149.68, Straits Times rose 3.89 points or 0.13% to 3,065.74, Shanghai Composite strengthened 4.93 points or 0.16% to 3,022.71 and KOSPI increased 7.74 points or 0.33% to 2,310.55, while Nikkei 225 slipped 294.73 points or 0.96% to 30,696.96, Hang Seng declined 31.79 points or 0.18% to 17,366.94 and Jakarta Composite plunged 35.82 points or 0.53% to 6,722.97.