Domestic rubber prices were slightly down on Friday as demand fell across India, especially in the north. | |
| The decline in demand was due to the transition period after the implementation of value-added-tax regime, market sources said. Traders would take time to adjust to the new tax structure, they said. |
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| The Centre introduced the VAT regime on April 1, replacing the state-level sales tax, a multi-point levy on each of the entities in the supply chain. |
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| Under the new tax regime, only the value-addition in the hands of each of the entities will be subject to tax. |
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| "We see the slight decline in rubber prices as a temporary phenomenon. Rubber prices will come to the previous level pretty soon. Prices are likely to be flat as demand has matched supply," said Ashok Khurana, a trader with the National Multi Commodity Exchange (NMCE). |
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| Rubber prices, which flared up in the last fortnight of March, stabilised now as the unfulfilled demand of last month was met by good supplies. |
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| A demand had built up for the commodity as spot trading was hit by the traders' strike to protest the introduction of VAT. |
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| Traders also resorted to hoarding as they anticipated higher profits in April with lower taxes under the value-added-taxregime. Stockpiling by traders pushed up prices. |
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| Under the value-added-tax regime dispensation, rubber is taxed at 4 per cent from 12.5 per cent earlier. |
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| Rubber supplies perked up in the previous week due to good rains in the rubber growing regions of Kerala, said Ketan Joshi, who also trades on NMCE. |
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| The price of latex was little changed at Rs 39.50 per litre, exclusive of taxes. |
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