New Delhi, Apr 27: Industry body Assocham today urged the government to withdraw tax on commodity trading. Besides, the chamber has sought withdrawal of five per cent hike in short term capital gains tax, excise levy on bulk cement imposed in Budget 2008-09 and reduction of four per cent across the board excise duty for small and medium enterprises (SMEs).
Emphasising that the current turnover of all commodities exchanges taken together is about Rs 40 lakh crore per annum, Assocham president Venugopal N Dhoot said if Commodity Transaction Tax (CTT) is imposed at 0.017 per cent and the turnover remains at current level, the maximum revenue collection would be Rs 680 crores.
''If the turnover drops to the level of 10 per cent of the current figure, the revenue collections would drop to Rs 68 crore 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,'' Mr Dhoot said in a statement.
Urging the Finance Minister to reconsider his decision of imposing 15 per cent short term capital gains tax on Indian Inc from 10 per cent, Mr Dhoot said, ''Since a very few sops have been availed to Indian Inc in Budget 2008-09, increasing short term capital gains tax by five per cent would be an additional burden on it and therefore it should be revoked.'' Similarly, excise on bulk cement has been increased by Rs 50 per tonne while that on clinker, it has been hiked by Rs 100 per tonne.
The cement industry alone would not be adversely affected by it, but it would have a cascading impact on the entire real estate sector as cement manufacturers would pass on this burden to end-users only, he added.