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The Centre is open to have a look into the demand for a reduction in commodity transaction tax (CTT) rate, Anurag Singh Thakur, Minister of State for Finance and Corporate Affairs, said.
“We can have a detailed discussion on that (CTT reduction).... We will talk to various departments and take action on that,” Thakur said at the Commodity Participants Association of India’s (CPAI) seventh international convention on ‘Building Indian Commodity Market for Job Creation and Sustainable Development’ here.
CPAI President Narinder Wadhwa in his remarks said that CTT was making India one of the most expensive markets to hedge commodity price risk.
Thakur said the government was committed to taking more steps to make the markets stronger in order to enable India become a $5-trillion economy and create millions of jobs.
It may be recalled that the concept of CTT was mooted in the Budget of 2008-09 by the then Finance Minister P Chidambaram. This was not implemented in the wake of vociferous opposition of commodity exchanges and traders.
However, CTT was once again imposed by P Chidambaram in 2013 on non-agricultural commodities futures contracts at a rate of 0.01 per cent of the contract price. While most agri commodities were exempt from CTT, some processed commodities later came under its ambit. In 2018, CTT was imposed on commodity options, too.
In his address at the convention, Thakur said the development of commodity derivatives market needs to be seen from the perspective of the country’s position in the global commodity map as one of the major producers, importers and exporters of commodities.
“Despite that, we are hardly the price makers or the price setters. This needs to change,” he said.
Recently, India became the first country in the world to launch diamond futures owing to concentration of diamond polishing and cutting here. “This itself is a reflection of the future potential of our commodity markets,” Thakur said.
Thakur said this government has ensured removal of all restrictions on equity brokers to deal in commodities and vice-versa. This is expected to enhance the accessibility of markets to retail participants, he said.
Implementation of GST will provide a further thrust to commodity markets by making physically delivered commodities move faster across States, Thakur said.
He also said the government is committed to creating gainful employment opportunities.
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