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In the 12 months since it took effect from July last year, the Union government is understood to have collected Rs 680-700 crore from the tax on non-agricultural commodities traded on recognised national commodity exchanges.
Known as Commodities Transaction Tax (CTT, the levy is 0.01 per cent), the collection is somewhat less than the Rs 900-1,000 crore estimated by the government. Sources say about Rs 600 crore was collected from the Multi Commodity Exchange and the rest from the other bourses.
The bulk of the volumes have been happening in metals and precious metals, and energy.
The government has also allowed setting off of gains and losses in commodity derivatives against normal business loss or profit. This is, however, only for commodities on which CTT is paid. Gains and losses on CTT commodities’ trading will not be eligible for a set-off.
Last week, the finance minister said while presenting the Union Budget for 2014-15 that only transactions chargeable to CTT shall not be considered speculative. Which would mean transactions in agri products are to be considered speculative. The law is to be amended to effect this.
In last January CBDT by a clarification has said this but now ministry has proposed an amendment in IT act to give effect to this treatment.
