MCX seeks clarity on CTT, wants to know if it applies to processed products

MUMBAI: Days ahead of the notification of commodity transaction tax (CTT), the country's largest commodity futures bourse, MCX, has sought clarity on whether the levy applies to processed products such as soya oil, sugar, guargum and rubber, apart from non-farm products like bullion and base metals.

The bourse is learnt to have written to the Forward Markets Commission (FMC) seeking clarity, said two persons familiar with the development. The finance minister had, in the Union Budget FY14, introduced the tax on non-farm products like bullion, base metals, and energy in which MCX posts the highest turnover among six commexes.

But he spared agri products from the tax. "Since the onus of collecting the tax rests with the exchanges, it is felt that the notification (on CTT) to be issued by CBDT should clarify on which commodities the tax is leviable for fear that if not collected, a bourse could have to pay the government from its own pocket," said one of the persons.

Shreekant Javalgekar, managing director & CEO, MCX, said, "We are ready to implement CTT as per government vision and are waiting for the necessary directions in this respect." FMC chairman Ramesh Abhishek was unavailable for comment.

Commexes have to route representations to the government through the FMC, which forwards the requests to its parent ministry, consumer Affairs, which, in turn, passes them on to the relevant ministry. The FMC regulates commodity futures trading across six national commexes and 15 regional ones.