The proposed Goods and Services Tax (GST), which is expected to come into effect from next April, would address many taxation issues faced by the commodity bourses, a top Multi Commodity Exchange (MCX) official has said.
"GST will also bring uniformity across the country in taxes or charges levied on bourses," he said.
There are a few states which levy taxes on commodity futures trading.
Rutten said futures instruments were treated as physical papers and not financial instruments despite being hedging tool. The non-agri commodity futures attract excise duty.
Rutten is optimistic about the future of commodity bourses and said business volumes would jump once banks were allowed by RBI to hedge their exposures and introduction of other derivative products like options in commodities and indices.
A bank' participation requires RBI's approval, while amendments to the Forward Contract Regulation Act (FCRA) is equired for introduction of 'options' products.
Meanwhile, MCX will hit the capital market on February 22 with 6.4 million shares from its existing shareholders.