| According to a top commodity futures exchange official, this is likely to hit trading volumes as a large part of deals is done through the proprietary traders. |
| "It's likely to affect the volumes through day trading and arbitrage as well. Trading is always better where margins are lower,"the official pointed out. |
| He also added that proprietary trading along with day trading and arbitrage would account for 75 per cent of the volumes traded on an exchange. |
| Besides, over 60 per cent of the total futures trading in commodities is on the Mumbai-based exchanges. However, currently it has been clarified that only traders from Maharashtra trading on these exchanges would be liable to pay the stamp duty. |
| According to Narendra Gupta, chief business officer, National Commodities and Derivatives Exchange of India (NCDEX), the duty would definitely be expected to raise the cost of transaction, and members could look at setting up businesses outside Maharashtra if it would save costs. |
| The ruling that came into effect as on May 7, however, offers a concession of 90 per cent on stamp duty payable on the physical delivery of goods. The duty applicable is now Re 1 per Rs 1 lakh of turnover for all the commodities across the exchanges. This was compared to variable duties earlier, on different commodities. For instance, on soyoil, the earlier duty was Rs 1 per Rs 10,000 turnover and for gold and silver it was Rs 1 per 1 kg and 50 kg respectively. |
| According to Jagdish Jaiswal, manager, Angel Commodities Broking, the uniform concession would encourage higher volumes with people interested in physical delivery participating. |
| However, with the inclusion of proprietary traders, the stock brokers who traded as individual members on the exchanges would be affected. |
| Heavy levy |
|
Top Section
Explore Business Standard