Budget 2013: FM announces to levy 0.01% CTT on non-agro commodity trades
FM in his budget speech announced to levy a commodity transaction tax of 0.01% on all non-agro commodity trades such as gold, silver.
By ET Bureau |
NEW DELHI: Finance minister P Chidambaram announced to levy a commodity transaction tax (CTT) of 0.01 per cent on all non-agro commodity trades such as gold, silver, non-ferrous metals and crude oil.
CTT will be similar to the securities transaction tax (STT), levied on the purchase and sale of equities in the stock market. So far, commodity transactions have been exempted from any levy.
However, agricultural commodities will be exempted from CTT. Experts say that levying CTT will not only add to revenue but also create a level playing field between the stock investor and the commodity exchange investor.
As per an estimate, the CTT will add to a revenue of Rs 5000 crore to the exchequer besides bringing in more transparency in the commodity trade. On the other hand, commodity exchanges termed this duty to be counterproductive.
"It will lower trade volumes and not contribute much to the government exchequer," said a representative of a commodity exchange. The government, however cut STT by 20% to 0.1 percent from 0.125 percent on cash delivery transactions.
CTT was originally proposed in Union Budget 2008 but abolished in the Budget of 2009 based on the recommendation of the Prime Minister's Economic Advisory Council.
CTT will be similar to the securities transaction tax (STT), levied on the purchase and sale of equities in the stock market. So far, commodity transactions have been exempted from any levy.
However, agricultural commodities will be exempted from CTT. Experts say that levying CTT will not only add to revenue but also create a level playing field between the stock investor and the commodity exchange investor.
As per an estimate, the CTT will add to a revenue of Rs 5000 crore to the exchequer besides bringing in more transparency in the commodity trade. On the other hand, commodity exchanges termed this duty to be counterproductive.
"It will lower trade volumes and not contribute much to the government exchequer," said a representative of a commodity exchange. The government, however cut STT by 20% to 0.1 percent from 0.125 percent on cash delivery transactions.
CTT was originally proposed in Union Budget 2008 but abolished in the Budget of 2009 based on the recommendation of the Prime Minister's Economic Advisory Council.
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