GST rollout: Commexes to face short-term headwinds

Rollout of new tax regime may dissuade investors from putting their money in agri-commodity market

The implementation of goods and services tax (GST) is likely to post short-term challenges for trading in commodity futures due to the transition into a new taxation system from July 1 and a concomitant increase in service tax to 18 per cent from an erstwhile levy of 15 per cent.

The GST roll-out may discourage players from infusing money in the agricultural commodities market. Lacking any escape route from the new tax regime, stockists and traders have resisted fresh buying, thereby, rendering the market weaker.  

GST is also expected to keep a check on the illegal trade practices, including the