Commodity traders have sought relief from double taxation as the Narendra Modi government, in its second term, prepares for its maiden budget on July 5.
The Commodity Participants Association of India, in a representation to Ministry of Finance, said trade volumes declined 63 percent since the commodity transaction tax was introduced in 2013-14.
Traders, the note said, pay 70-80 percent tax due to double taxation as this tax is currently treated as an expense. This leads to the levying of tax on tax as traders have to pay a presumptive CTT, it said. A tax on business income is charged on this, the note said.
This tax assumes the form of a presumptive direct tax, and is levied upfront when a transaction takes place, irrespective of loss or profit, the body said, calling it “regressive”.
The traders also asked the government to cap this tax at 34 percent—on par with tax on business income. This, they said, would lead to a surge in trade volumes and government revenue.
Traders also sought abolition of stamp duty on stock exchange transactions, which is levied on value of shares transferred.
Other suggestions:
- Exempting long-term capital gains tax on securities held for three or more years.
- An alternative to dividend distribution tax that will make recipients pay 10 percent.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
