Sensex 29182.95 -498.82 -1.68%
Nifty 8808.9 -143.45 -1.6%
|Taxable commodities transaction||Rate||Payable by|
|Sale of commodity derivative||0.01%||Seller|
CTT shall be levied on non-agricultural commodities futures contracts at the same rate as on equity futures that is at 0.01% of the price of the trade.
According to the finance ministry estimate, CTT will bring revenues of around Rs.45 billion to government. It is also aimed at bringing transparency in the commodity exchange market. However, CTT would raise transaction costs of the commodities traded on the exchanges.
If CTT is imposed, Multi Commodity Exchange, National Commodities and Derivatives Exchange, National Multi Commodity Exchange, Indian Commodity Exchange and Ace Derivatives and Commodity Exchange would be affected.
CTT is levied on the value of taxable commodities transaction as:
CTT is not new. The Finance Act 2008-09 proposed a levy of CTT at 0.017% for sale of an option in goods or an option in commodity derivative and sale of any other commodity derivative and 0.125% for sale of an option in goods or an option in commodity derivative, where option is exercised.
Till now, traders have to pay brokerage on buying and selling the commodities. But from now on CTT will be charged which will increase the transaction cost of trading in non-agri commodities. The CTT will be additional burden on traders because they already pay deposit margin, brokerage, stamp duty and transaction charges.
India Infoline News Service / 09:04, Jan 22, 2015
The outlook is a flat start. The market will look to scale to new peaks though not much effort is needed for the same. HUL saw a rally and short-covering may have pulled it up further. Speculation is on that its parent will raise stake through an open offer. After the cooling in oil prices, Cairn results will be in focus.