The government on Monday abolished the Commodity Transaction Tax (CTT) that was announced in the Budget last year, but was yet to be implemented and the commodity exchanges rejoiced the decision.
Leading stock exchange NSE on Tuesday reported a 94 per cent year-on-year surge in consolidated profit after tax to Rs 3,834 crore for three months ended December 2024. It posted a Profit After Tax (PAT) of Rs 1,975 crore in the year-ago period.
On Sunday, exchanges and brokers got support against CTT from the apex commodities market regulator--the Forward Markets Commission. The regulator said that it would take up the demand for CTT withdrawal with finance minister Chidambaram.
Despite lobbying by bourses, FinMin mulls tax to monitor the market.
In a memorandum to the Finance Minister, the exchanges said that FM's proposal to impose the Commodities Transaction Tax (CTT) will ruin the budding commodity futures business in India. In its arguments, it said CDM is at a nascent stage. It is only 4 years old. Participation of banks, mutual funds, FIs, FIIs is still not allowed. Options contracts, index futures & futures based on intangibles are still to come. Cost increase in India will induce hedgers to global exchanges.
The run in equities, coupled with high interest rates, makes both the debt and stock markets attractive.
The Committee, in an earlier report on the Direct Taxes Code (DTC) Bill, had favoured abolition of STT.
Finance Minister Pranab Mukherjee on Thursday tabled the Economic Survey for 2008-09 that prescribes doing away with cess, surcharges on taxes, including fringe benefit tax, and sweeping refroms in areas like petrol pricing and financial sector.
Hope floats for higher trading volumes; warehousing and cold chain facilities get tax incentives.
Recommending an end to all cesses and surcharges on taxes, and free pricing of fertiliser and fuel ahead of the Union Budget for 2009-10, the Economic Survey suggested on Thursday aggressive disinvestment and financial sector reforms to bring the economy back to high growth track.
SST remains as a turnover tax (whether profit or loss) and not tax on income. Day traders and arbitrageurs, who generally trade on thin margins, are affected the most as STT raise their transaction cost. Any further hike in SST could prove negative and damper market sentiments. Removal or reduction in STT will pep up the stock market. Asset pricing is also likely to go up with reduction in transaction cost.
The removal of Commodities Transaction Tax (CTT) in the Budget 2009-10 may impact securities trade as investors may consider diverting focus to commodities market, SMC Capitals said in a report.
In an hour-long chat on rediff.com on Thursday, DCW chairman Mudit Jain replied to many queries on how Budget affects the common people.
In an hour-long chat on rediff.com on Thursday, founding chairman & managing director of Country Club, India Rajeev Reddy analysed how good is the Budget for the common people.
In an hour-long chat on rediff.com on Wednesday, COO of Dun & Bradstreet, India Kaushal Sampat offered some tips. Here is the transcript:
The Finance Minister Pranab Mukherjee on Monday tabled the Economic Survey for 2008-09 that prescribes doing away with cess, surcharges on taxes, including Fringe Benefit Tax, and sweeping refroms in areas like petrol pricing and financial sector.
The commodity transaction tax (CTT) proposal has started taking its toll on commodity exchanges. According to exchange officials, the turnover of commodity bourses has dropped sharply on transaction tax proposal and reports that the government may ban Futures trading of more commodities. The turnover may get eroded by another 20-30% once CTT comes into effect. CTT was unique and it has not been imposed on any Futures market anywhere in the world.
Direct tax expert Vikas Gandhi offers some valuable tax-saving tips.
In a chat on rediff.com, direct tax expert Vikas M Gandhi offered some valuable tax-saving tips.
In an hour-long chat on Thursday, direct tax expert Vikas Gandhi offered some valuable tips.
Unveiling the Budget for 2009-10, Finance Minister Pranab Mukherjee said, "MAT was introduced to address inequity in taxation of corporate taxpayers. In the quest for greater equity, I propose to increase the rate of MAT to 15 per cent of book profit from the present rate of 10 per cent."
Finance Minister Pranab Mukherjee has announced that Fringe Benefit Tax (FBT) has been abolished. The commodity transaction tax (CTT) has also been abolished. The Goods and Services Tax (GST) will come into effect from April 01, 2010, Mukherjee said.
A higher transaction tax is likely to defeat the very purpose of commodity markets by forcing farmers and hedgers to exit due to greater cost, an ICRIER report said.
The uncertainty over the implementation of the new tax continues as the Finance Bill has not been passed by the Parliament. Finance minister P Chidambaram had announced in his Budget proposal that the levy would come into effect from April 1. The uncertainty over the implementation of the new tax continues as the Finance Bill has not been passed by the Parliament. P Chidambaram had announced in his Budget proposal that the levy would come into effect from April 1.
With the introduction of CTT, commodity players raise their doubts about the fledgling futures market.
The proposed commodity transaction tax of Rs 17 per lakh was part of the Union Budget 2008-09 that was approved by the Parliament in the last session and is yet to be notified. Asked about timeframe of notification, Pawar said, 'first you allow us to discuss and take a final view.'
The implementation of the commodities transaction tax is likely to be delayed to the end of the year or even next year, thanks to the spiralling inflation and its political fallout.
The commodities transaction tax is likely to come into force within the next two months as the details, including the collection, payment and the procedures for filing returns, will take some more time to be firmed up. The CTT, which will be administered by the Central Board of Direct Taxes, will be levied at the rate of 0.017 per cent on sellers of commodity futures as well as options. Purchasers of options, who exercise them, will pay 0.125 per cent
Much of the rise in prices has been in food items
While the declarations under the scheme have to be filed by December 31, 2020, the government had in October extended the deadline for making payment by three months till March 31, 2021, in view of the ongoing Covid-19 pandemic.
The exchange has always seen huge volumes in gold trading. But due to a fall in prices, volumes took a hit.
In terms of value, this translates into more than Rs 300 crore (Rs 3 billion) of delivered quantity.
Sources said much has been done to ease the tax burden of the middle classes in the last five years, and that such a measure affects only a limited segment of people when the focus should be to put money in rural areas. Archis Mohan reports.
Finance firms in these SEZs likely to get tax breaks.
Regulated electronic platforms such as e-spot markets or spot exchanges may be deemed as authorised markets.
A key demand is to reduce the dividend distribution tax on listed firms.
MCX and MCX-SX are facing the worst crisis in their existence following the Rs 5,574 cr fiasco at the National Spot Exchange.
The RBI is considering permitting FII and commercial banks to trade on Indian commodity exchanges.
The exchange, say sources, began mock trading from early October and around 250 Indian brokers have said they'd take membership of the international exchange.
A Delhi University alumnus with an MBA in finance and a doctorate, Vaish started his career as a banker in 1984, became an academician a few years later and joined the capital market in 1998.
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