| Commodity Tax from July |
|
Mumbai, 20 June The ministry of finance today notified the Commodity Transaction Tax ( CTT) and Rules, effective July 1. It had been proposed in the Union budget and is to apply to all non- agricultural commodities traded on futures exchanges. There are six such national exchanges. All processed agri commodities, such as oils and sugar will be considered non- agri commodities for the purpose of the tax. The levy will attract ₹ 10 on every ₹ 100,000 of business on the exchange by the seller. Almond, barley, cardamom, castor seed, chana, copra, coriander, cotton, cotton seed oilcake, guar seed, isabgul seed, cumin seed, kapas, maize feed, pepper, potato, mustard seed, raw jut, red chilli, soybean, soymeal, turmeric and wheat are categorised as agri commodities. Notification of the CTT was delayed because of the ambiguity in the classification between agri and non- agri. The anomaly continues with the classification of some processed items, such as cotton, soymeal and cotton seed oilcake as agri commodities and, therefore, exempt. The rules specify that the exchanges must collect the tax from members and pay to the central government. With all processed agri commodities being classified 'non- agri', the tax is set to cover about 95 per cent of the business of commodity exchanges. During 2012- 13, registered commodity exchanges had a cumulative turnover of ₹ 17,046,840 crore, as against ₹ 18,126,104 crore in 2011- 12. Around 95 per cent was from non- agri commodities. The tax is expected to add around ₹ 1,500 crore in the government's kitty in the current financial year. "Without processing cotton oilseed, it is impossible to obtain cake. Hence, classifying cotton oilcake as an agri commodity is unfair. Similarly, rubber and coffee are purely agri commodities. But, by the government definition, they are non– agri and therefore, taxed. This is not understandable," said Anil Mishra, managing director of the Ahmedabad- based National Multi Commodity Exchange. Commodity exchanges have not listed sugarcane for hedging, as this raw material for sugar is purely farmer- driven. But, it would be impossible to assume hedging in sugar without sugarcane. Hence, CTT would drive actual farmers and mills away from hedging in sugar, he added. Samir Shah, managing director of the National Commodity & Derivatives Exchange, the largest agricentric platform, said: " We do see some agri products missing in this list. We will take this up separately with the authorities. Generally for our products we see limited impact, as our focus has been on value chain participants and hedgers and these participants are more long- term players." A senior official from Ace Derivatives & Commodity Exchange termed the classification "unfair". "CTT will drive away volumes to ' dabba' ( unorganised) markets and overseas locations, leading to higher volatility and lower trading activity," said Ajay Kedia, managing director, Kedia Commodity Comtrade. Rules notified, to cover all processed agri products and 95% of comtrade business |
--
Company Secretary, Chennai
This mail and its attachments (if any) are confidential information intended for persons to whom the email is planned for delivery by the sender. If you have received this mail in error please notify the sender of the error by forwarding the email and its attachments (if any) and then deleting the mail received in error and the relevant email trail in this connection without making any copies or taking any prints.
__._,_.___
No comments:
Post a Comment