Commodity trading gets a boost; no VAT on foodgrains, tea

MUMBAI: Maharashtra Budget for the year 2007-08 offers some good news for the commodity market players. From April 1 all commodity market transactions will attract no stamp duty.

And what’s more, the duty concession has been offered with retrospective effect. Now, commodity market transactions would enjoy tax breaks that have already been offered to capital market deals.

Last year, the state’s decision to levy stamp duty on capital market transactions being recorded in Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) irrespective of the geographical location of the participants had created quite a flutter in the market.

After loud protests that exposed the irrationality behind the decision, the state government withdrew it. Mr Patil on Thursday acknowledged the difficulty the traders faced in the past.

“The transactions in commodity markets and capital markets are now carried out on automated systems. In some instances both the broker and the purchaser are from outside the state,” he noted.

Recalling his decision not to levy stamp duty in such instances, Mr Patil said: Exactly the same difficulty arises regarding transactions in the commodity markets. I have therefore decided that these types of transactions in the commodity market will be exempted with retrospective effect, from the same date as applicable to the capital market.

Mr Patil also spared foodgrains, flour, tea and a few other essential commodities from VAT for another six months.