CTT likely to be notified soon to combat prices

New Delhi, July 6: With Inflation showing no signs of cooling off despite the array of fiscal and monetary measures employed by the Centre, the Government is set to operationalise the commodities transaction tax (CTT) ‘sooner, rather than later.’ This is a U-turn on its earlier stance to put off the notification of CTT to a later date.

The Prime Minister’s Economic Advisory Council, which had earlier recommended a review of the tax and a reduction in its rate as it would hurt commodities trading volumes and contribute to inflationary pressures, has had a rethink on the matter. It is now inclined to implement the tax, expecting it to put a dampener on commodities trading, which it fears is fuelling inflation.

“We feel that speculative trading is largely responsible for the higher prices of certain commodities. So, introducing the CTT would to some extent help in discouraging such activities,” a senior government official said.

The tax, introduced in this year’s Budget, has not been notified so far, since the finance ministry was waiting for inflation levels to come down. The ministry initially expected to implement the tax by June.

CTT, on the lines of the securities transaction tax (STT), would be levied on commodities transactions, including the sale and purchase of options in goods and any other commodity derivatives. The tax rate would be between 0.017 per cent and 0.125 per cent.

To stop any price rise due to speculative trading, the government has already suspended futures trading in chana, soyabean oil, rubber and potato for four months. Over the past two years, the government has banned futures trading in wheat, rice and lentils. Commodity exchanges have been opposing the tax on the grounds that it would increase the transaction costs at the exchanges and hurt their business.

Ads By Google

Message*	Maximum characters allowed

Name*		Email ID*
Subject*		Country*

TERMS OF USE:
The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).

I agree to the terms of use.

Mail this page