Mumbai, April 12:
Delays in the Budget being cleared in Parliament and in rollout of the proposed commodity transaction tax (CTT) are expected to cost the Government Rs 250 crore, according to analysts estimates.
The Budget, presented on February 28, is yet to be cleared by Parliament. The Budget session will restart on April 22, after a months break. Even if it is cleared in April, analysts expect the CTT to be implemented only in June as the tax needs to be notified after receiving the Presidents approval.
Unveiling the Budget, Finance Minister P. Chidambaram had proposed a CTT of 0.01 per cent on non-agriculture commodity futures trading, in line with equity futures, to augment financial resources.
Being a new tax, CTT cannot be implemented from April 1. It has to go through a process, giving market participants adequate time to make changes in the system to implement the tax, said a commodity exchange executive.
The Government is expected to garner Rs 1,000-1,500 crore by way of revenues from the commodity transaction tax, if the current trend in the futures market continues, say analysts.
Assuming that commodity exchanges log in an average daily trade of Rs 70,000 crore, of this the non-agriculture portion is about Rs 60,000 crore. At 0.01 per cent, the CTT on this would work out to Rs 1,000 per crore, or Rs 6 crore a day and Rs 1,500 crore a year.
Hence, a delay of two months in implementing the tax will cost the Government about Rs 250 crore.
However, the markets concern is that trading interest in the futures market has been falling steadily the last five months. Turnover was down 5 per cent at Rs 16,479,189 crore (Rs 17,369,551 crore) last fiscal up to March 15.
The cumulative bullion turnover plunged 23 per cent to Rs 7,633,265 crore (Rs 9,859,515 crore), though agriculture commodities registered a marginal increase of 3 per cent Rs 2,101,278 crore (Rs 2,033,200 crore).
Anand Tandon, Group CEO, JRG Securities said broking houses were preparing to make suitable modifications in the system, even as they were awaiting the Governments notification to roll out the tax.
I only hope that the tax is not levied with retrospective effect from April, as we are not in a position to collect the tax now without the Government notification, he said.
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Delays in the Budget being cleared in Parliament and in rollout of the proposed commodity transaction tax (CTT) are expected to cost the Government Rs 250 crore, according to analysts estimates.
The Budget, presented on February 28, is yet to be cleared by Parliament. The Budget session will restart on April 22, after a months break. Even if it is cleared in April, analysts expect the CTT to be implemented only in June as the tax needs to be notified after receiving the Presidents approval.
Unveiling the Budget, Finance Minister P. Chidambaram had proposed a CTT of 0.01 per cent on non-agriculture commodity futures trading, in line with equity futures, to augment financial resources.
Being a new tax, CTT cannot be implemented from April 1. It has to go through a process, giving market participants adequate time to make changes in the system to implement the tax, said a commodity exchange executive.
The Government is expected to garner Rs 1,000-1,500 crore by way of revenues from the commodity transaction tax, if the current trend in the futures market continues, say analysts.
Assuming that commodity exchanges log in an average daily trade of Rs 70,000 crore, of this the non-agriculture portion is about Rs 60,000 crore. At 0.01 per cent, the CTT on this would work out to Rs 1,000 per crore, or Rs 6 crore a day and Rs 1,500 crore a year.
Hence, a delay of two months in implementing the tax will cost the Government about Rs 250 crore.
However, the markets concern is that trading interest in the futures market has been falling steadily the last five months. Turnover was down 5 per cent at Rs 16,479,189 crore (Rs 17,369,551 crore) last fiscal up to March 15.
The cumulative bullion turnover plunged 23 per cent to Rs 7,633,265 crore (Rs 9,859,515 crore), though agriculture commodities registered a marginal increase of 3 per cent Rs 2,101,278 crore (Rs 2,033,200 crore).
Anand Tandon, Group CEO, JRG Securities said broking houses were preparing to make suitable modifications in the system, even as they were awaiting the Governments notification to roll out the tax.
I only hope that the tax is not levied with retrospective effect from April, as we are not in a position to collect the tax now without the Government notification, he said.
[email protected]
