Remove double taxation on commodity trading: CPAI

Since CTT introduction in 2013, market volume has plunged 63%, says commodity association

The Commodity Participant Association of India (CPAI) has urged the government to remove double taxation on commodity traders in the form of commodity transaction tax (CTT) and further tax on business income.

In a presentation made to the Finance Ministry, the Association said, CTT is in the nature of a presumptive direct tax levied upfront when a transaction is executed irrespective of loss or profit, and hence, it is regressive according to progressive economic theory as it is neither on profits nor on value-addition.

The CPAI delegation including Ashok Agarwal, Chief Mentor, Narinder Wadhwa, President and past presidents Shiv Kumar Goel and BK Sabharwal met Anurag Thakur, Minister of State for Finance, Sanjay Sanyal, Principal Economic Advisor, and Rose Merry, Director — Commodities, MoF, in New Delhi to make their representation.

When CTT was introduced in 2013, the Association said the market volume fell 63 per cent and the government’s hope to collect higher tax also did not materialise as it collected hardly ₹500 crore.

Securities transaction tax was introduced in lieu of zero long-term capital gains and concessional short-term capital gains. However, commodities is subject to 34 per cent tax.

‘Treat CTT as tax’

The current problem is that after paying CTT, traders have to pay normal tax which leads to double taxation rates of 70-80 per cent as CTT is treated as an expense not as a tax paid.

“We request that instead of an expense, CTT be treated as a non-refundable tax or rebate under Chapter VIII like Section 88E,” it said.

All instruments that are covered by a transaction-based tax and resulting in settlement in dematerialised manner should be brought under the Depository Act, 1996, and be exempted from further levy of stamp duty. Further, when GST was implemented, the government assured that there would be only two taxes — a direct income tax and an indirect GST which would subsume all other taxes.

In the commodity sector, GST is paid on brokerage on physical delivery of goods and on exchange charges and warehouse charges. Hence, stamp duty should not be levied, it said.

Source- Business Line.

The post Remove double taxation on commodity trading: CPAI appeared first on GST Station.



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