Commodities transaction tax to come into effect from 1st July
Moneylife Digital Team 20 June 2013

Besides gold, silver, crude oil and base metals, processed farm items like sugar, soya oil and guar gum will come under CTT, according to the notification from the finance ministry

 

Commodities Transaction Tax (CTT) will be levied at 0.01% on various non-agricultural commodities, including gold, sugar and edible oils, with effect from 1st July.

Notifying the CTT today, the finance ministry said 23 agricultural commodities, including wheat, barley, chana, cotton and potato, would be exempted from the levy.

The tax would be levied on futures trading and not on spot trading in the commodities. Besides gold, silver, crude oil and base metals, processed farm items like sugar, soya oil and guar gum will come under CTT. Coriander, cardamom and guar seed is also out of CTT.

In the 2013-14 Budget speech, finance minister P. Chidambaram had said that the commodity transaction tax will be levied on non-farm items at the rate of 0.01% and would be paid by the seller.

According to sources, the implementation of CTT has been delayed as there have been consultations between the stakeholders and the finance ministry over the list of non-agri commodities to be brought under the ambit of CTT.

Exchanges and brokers are of the view that CTT would discourage day traders and speculators, resulting in a big drop in business of five national bourses.

There are 22 commodity bourses in the country, of which six of them operate at national level. The combined turnover of these bourses stood at Rs1,70,46,840 crore in 2012-13, down by 6% from the previous fiscal.

Of the total turnover, more than 80% comes from non-agricultural commodities.
 

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