The bread and butter of the commodities traders is the Arbitrage Trading, with which they earn their living. After the proposal of commodity trading tax or CTT, majority of their earnings will go into the tax payment.
Hence, along with the market makers, traders of the commodities markets, even the regulators have started to lobby around for elimination of this CTT proposal. Commodities market regulator Forward Markets Commission (FMC) has taken up cudgels on behalf of commodity exchanges to exempt futures trading from the proposed commodities transaction tax.
As per the news, The tax will kick in soon after the Finance Bill is enacted and will see a 0.017% levy on option premium and the sales price of a commodity derivative. While the seller will have to shell out the payment in both cases, the purchaser will be required to pay 0.125% on the settlement price of options in commodity derivative or an option in goods.
The tax is expected to hit day traders, who account for nearly three-quarters of the trading volume of around Rs 40 lakh crore.
| FMC is learnt to have countered by saying that it was wrong to compare the commodities and the equities markets since both had a different character. Besides, commodities, it said, was not an asset class for investment. | Table of Contents |
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