Business
Centre-states may discuss early inclusion of natural gas into GST fold

With GST revenue collections making a rebound post the disruptions caused by the second wave of Covid pandemic, the Centre is likely to initiate dialogue with states for inclusion of petroleum products under the new indirect tax fold.
Sources privy to the development said that based on the Petroleum Ministry’s suggestion, the Centre may take up with GST Council the issue of bringing natural gas under the Goods and Services Tax (GST) regime to begin with before the entire oil and gas sector is brought under it.
The 45th GST Council meeting is scheduled on September 17, 2021 at Lucknow. Though the council members will discuss several pending issues such as states compensation, revision of GST rates on Covid essentials, inverted duty structure, the Centre is also likely to take up the case for early inclusion of gas into the new taxation fold.
With revenue position remaining strained due to Covid-19 outbreak, states have been reluctant to consider bringing high revenue generating petroleum products under GST fold. But with GST collections improving substantially this year remaining above the Rs 1 lakh crore psychological-mark in most months of FY22, the Centre feels it is the right time to push for tax reforms in the oil and gas sector as well with the inclusion of gas helping in plan to develop a gas-based economy in the country.
Inclusion of gas would not pose a challenge for the GST Council as it is largely an industrial product where a switchover to the new taxation would not be difficult. The revenue implication for the states is also low in the case of this switchover.
“States are in a fairly better position now with GST revenue hitting over Rs 1 lakh crore-mark for the past few months and Centre has also improved their liquidity position through additional borrowing schemes. This should make phased inclusion of petroleum products under GST easier for the council,” said an official source in the oil ministry.
GST levy on natural gas would help state-run oil companies such as ONGC, IOCL, BPCL and HPCL to save tax burden to the tune of Rs 25,000 crore as they would get credit on taxes paid for inputs and services. Tax credits are not transferable between the two different taxation systems.
The Steering Committee for Advancing Local Value-Add and Exports (SCALE) chaired by Mahindra & Mahindra MD & CEO Pawan Goenka in its report to the commerce ministry has also batted for provision of input tax credit of natural gas to make its prices more competitive. This could happen once it is included in GST.
Sources said Council could consider a three-layered GST structure for gas where residential piped natural gas (PNG) is taxed at a lower rate of 5 per cent, commercial piped natural gas could be taxed at a median rate of 18 per cent, and car fuel CNG could be taxed at a maximum rate of 28 per cent. However, such a proposal has not yet been drafted and it could be put on table after consensus is arrived at inclusion of gas under GST.
Gas sales, including CNG and piped gas supplies, attract VAT ranging from 5-12 per cent.
As part of its efforts to build consensus with the states on GST launch, the government had decided to exclude five petroleum products — crude oil, petrol, diesel, ATF and natural gas — from the list of items placed under GST, but included products such as cooking gas, kerosene and naphtha in the new regime.
Business
FIIs to resume equity purchases in India as bulls roar: Analysts

Mumbai, May 12: The ceasefire between India and Pakistan has paved the way for a sharp rally in the market and with this, foreign institutional investors (FIIs) are likely to resume their equity purchases in India, analysts said on Monday.
Sensex and Nifty surged more than 2.7 per cent in the morning trade.
According to market watchers, the prime mover of the rally will now be the FII buying, which has been sustained for 16 continuous days except last Friday when the conflict escalated.
“Domestic macros like expectations of high GDP growth and revival of earnings growth in FY26 and declining inflation and interest rates augur well for the resumption of a rally in the market,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
FIIs favour large caps like ICICI Bank, HDFC Bank, Bajaj Finance, L&T, Bharti, Ultratech, M&M and Eicher. Midcap IT and digital stocks are other segments to watch.
Pharma stocks may come under near-term pressure from US President Donald Trump’s latest announcement regarding reducing prices of drugs in the US.
“There are rumours of impending US deal with China on trade but details are yet to come. If a deal materialises that would be good for the global economy,” said Vijayakumar.
The hallmark of FPI investment in recent days has been the sustained buying by FIIs. FIIs bought equity through the exchanges consecutively for 16 trading days ending 8th May for a cumulative amount of Rs 48,533 crore.
“They sold for Rs 3,798 crore on 9th May when the India-Pak conflict got escalated. Now that ceasefire has been declared, FIIs are likely to resume their equity purchases in India,” said analysts.
It is important to understand that FIIs were continuous sellers in India in the first three months of this year. The big selling began in January (Rs 78,027 crore) when the dollar index peaked at 111 in mid-January.
Thereafter, the intensity of selling declined. FIIs turned buyers in April with a buy figure of Rs 4,243 crore.
Business
Centre approves reopening of 32 airports as tensions ease on India-Pakistan border

New Delhi, May 12: The Centre on Monday issued the NOTAM (Notice to Airmen) to reopen the 32 airports that had been shut down since May 9 due to the cross-border drone and missile attacks following heightened tensions between India and Pakistan in the wake of the Pahalgam massacre of 26 tourists by Islamabad-backed terrorists.
The airports that will gradually reopen include Chandigarh, Srinagar, Amritsar, Ludhiana, Bhuntar, Kishangarh, Patiala, Shimla, Kangra-Gaggal, Bathinda, Jaisalmer, Jodhpur, Bikaner, Halwara, Pathankot, Jammu, Leh, Mundra, Jamnagar, Hirasar, Porbandar, Keshod, Kandla and Bhuj.
The airports will be opened gradually as, although the ceasefire announced following the Pakistan DGMO’s (Director General of Military Operations) request is largely holding, the government does not want to take any chances.
“The night remained largely peaceful across Jammu and Kashmir and other areas along the International Border. No incidents have been reported, marking the first calm night in recent days,” according to a statement issued by the Indian Army on Monday.
The opening of these airports which are close to the Pakistan border reflects a de-escalation in the cross-border hostilities which saw India successfully launching ‘Operation Sindoor’ to avenge the Pahalgam killings.
The reopening of these airports will help to restore normalcy in flight operations which have undergone widespread disruption due to the conflict.
Meanwhile, Delhi International Airport Limited (DIAL) said on Monday that operations at the airport are “currently smooth,” however, due to changing airspace conditions and increased security measures, some flight schedules and security checkpoint processing times may be affected.
The airport management has advised passengers to follow updates and instructions from their airlines, allow extra time for security checks due to heightened measures and adhere to hand baggage and check-in luggage regulations.
Passengers have been advised to check the latest flight status through their airline or the official Delhi Airport website.
Although an agreement for a ceasefire was reached on Saturday, the government is not taking any chances on the security front.
Prime Minister Narendra Modi held a meeting on Sunday with the three service chiefs and the Chief of Defence Staff to take stock of the latest situation.
Business
SIP inflows hit all-time high of Rs 26,632 crore in April: AMFI data

Mumbai, May 9: India’s mutual fund industry saw a historic surge in systematic investment plan (SIP) contributions in April, with investors pouring in a record Rs 26,632 crore last month, according to data by the Association of Mutual Funds in India (AMFI) released on Friday.
This marks the highest-ever SIP inflow for any month, the report said.
In April, 1.36 crore SIP accounts were either closed or matured as part of this process. However, investor interest remained strong. The number of active SIP accounts grew to 8.38 crore in April, up from 8.11 crore in March, showing that people are still keen on building long-term wealth through mutual funds.
April also saw the creation of 46 lakh new SIP accounts, higher than the 40.19 lakh new accounts opened in March.
AMFI said the spike in account closures was due to a planned clean-up and is likely to reduce sharply from May onwards.
“The sustained inflows underscore improving investor sentiment, supported by strong corporate earnings, resilient macroeconomic fundamentals, and a continued tilt towards equities as the preferred asset class,” said Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India.
Notably, the absence of any major new fund launches during the month indicates that investors largely allocated capital to existing schemes — a testament to their confidence in the long-term growth prospects of Indian equity markets, he added.
The record-breaking investment came even as the industry undertook a large clean-up of inactive accounts.
Despite a slight dip in inflows into equity mutual funds, the overall mutual fund industry continued to grow rapidly.
Total assets under management (AUM) reached an all-time high of Rs 70 lakh crore in April.
This is a big jump from Rs 65.74 lakh crore recorded in March — showing strong investor confidence in the market.
Large-cap mutual funds, which had faced outflows in recent months, bounced back with net inflows of Rs 2,671.46 crore in April.
This was a slight increase from Rs 2,479.31 crore in March. According to the report, this suggest that investors are regaining interest in these relatively stable funds.
Mid-cap funds attracted Rs 3,313 crore during the month, a minor drop from Rs 3,438.87 crore in March.
Meanwhile, small-cap funds continued to perform steadily, drawing Rs 3,999.95 crore in April, only slightly lower than the Rs 4,092 crore they received the month before.
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