Commodity transaction tax to be levied from July 1
June, 21st 2013
Commodity Transaction Tax (CTT) will come into effect from July 1 with a levy of 0.01 per cent of the transactional value being applicable on the seller in futures trading of a host of items such as gold, sugar and edible oils.
Apart from gold, other commodities such as silver, crude oil and base metals and processed farm items such as sugar, soya oil, mentha oil and guar gum will also come under CTT.
According to a Finance Ministry notification here on Thursday, 23 pure agricultural commodities such as wheat, barley, chana (gram), cotton and potatoes would be exempted from the levy.
Also in the exempted category are some other farm produces such as coriander, cardamom and guar seeds.
In effect, the CTT — as proposed in the Budget for the current fiscal — will primarily be applicable on nearly a dozen processed agricultural commodities at the rate of 0.01 per cent of the transaction value.
In his 2013-14 Budget speech, Finance Minister P. Chidambaram had stated that CTT — on the lines of the Securities Transaction Tax (STT) in the capital market — would be levied on non-farm items to be paid by the seller only in futures trading.
At 0.01 per cent of the transaction value, the levy would work out to Rs.10 on a deal worth Rs.1 lakh.
The implementation of CTT, however, got delayed owing to detailed consultations between the Ministry and various stakeholders on the list of non-farm commodities to be brought under the levy.
Out of the 22 commodity bourses in the country, only six of them operate at the national level. In 2012-13, the combined turnover of these exchanges stood at Rs.170,46,840 crore, six per cent lower as compared to the previous fiscal. Also, of the total turnover, while over 80 per cent comes from non-agricultural commodities, the turnover from futures trade accounts for about 15 per cent of the total trade in commodity segment.