Thursday, June 5, 2008

Assocham wants withdrawl of CTT

by Jo Black

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has stated that the Commodity Transaction Tax (CTT) will render commodities markets unviable and therefore should be withdrawn.

In addition, the Chamber in a representation to the Indian Finance Minister has sought withdrawal of the 5% hike in short term capital gains tax, excise levy on bulk cement imposed in the 2008-09 budget and reduction of 4% across the board excise duty for SMEs.

ASSOCHAM President, Mr. Venugopal N. Dhoot has emphasized that the current turnover of all commodities exchanges taken together is around Rs. 40000 billion ($1025.6 billion) per annum.

If CTT is imposed at 0.017% and the turnover remains at current level, the maximum revenue collection would be Rs.6.8 billion ($174.3 million).

If the turnover drops to the level of 10% of the current figure, the revenue collections would drop to Rs.68million ($1,74 million) per annum only.

Therefore, the CTT is uncalled for as with its imposition, the annual turnover of commodities exchange is bound to fall down and government is unlikely to collect much of revenues through CTT. Therefore, this should be dropped, said Mr. Dhoot.

The ASSOCHAM Chief also urged the Finance Minister to reconsider his decision for imposing 15% short term capital gains tax on Indian Inc in budget proposals for 2008-09 and bring back the ceiling to previous levels of 10% only.

The ASSOCHAM is also of the view that a definite road map should be laid to enable public sector undertakings to offload their 10% equity without any hassle, and auction the loss making state owned enterprises to best bidders.

Mr. Dhoot argued that since a very few sops have been availed to Indian Inc in budget of 2008-09, increasing short term capital gains tax by 5% would be an additional burden on it and therefore, it should be revoked.

 

 

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