The Forward Markets Commission has suggested that all the processed agriculture commodities traded on the exchange platform should be exempted from the proposed commodity transaction tax.
Some of the processed commodities traded on the exchanges include guar gum, refined soya oil, soyameal, cotton oilseed cake and RBD palmolein. These commodities, which attract good volumes, are not directly cultivated by the farmers, but derived from farm products.
Unveiling the Budget in February, Finance Minister Chidambaram proposed a transaction tax of 0.01 per cent on non-agriculture futures traded on the bourses.
Ramesh Abhishek, Chairman, FMC, said it has been the stated policy of the commission to facilitate futures trading in agriculture commodities. That is one of the reasons why all the processed agriculture commodities also in this list. “We thought it is fit to make this suggestion as clarity was needed to avoid questioning by the income tax authorities in future,” he said.
suresh.iyengar@thehindu.co.in