Leading commodity exchange MCX today said it would not reduce the transaction fee to make up for Maharashtra government's proposal to impose higher stamp duty on commodity transactions for fear of losing its clientale.
"The stamp duty has been hiked without any consultation with commodity exchanges. We will approach the regulator FMC and also the state government on this issue," Multi Commodity Exchange (MCX) Managing Director and CEO Lamon Rutten told PTI.
Transaction fee of an exchange is paid by members (brokers) and is calculated at the rate of every Rs 1,00,000 of business and on the basis of their daily turnover on the bourse.
In the state budget unveiled on Wednesday, the government proposed to levy a stamp duty of Rs 5 on every Rs one lakh transaction in commodity trade, which is higher than the existing Rs one per lakh transaction.
"Our transaction fee slabs are already low. We are charging on an average transaction fee of Rs 1.8 for every Rs one lakh turnover." We cannot reduce it further," he said.
Currently, members in MCX are paying transaction fee of Rs 2.50 for daily turnover of up to Rs 250 crore, while Rs 1.25 on a turnover between Rs 250 crore and Rs 1,000 crore and Re 1 for a daily business of more than Rs 1,000 crore.
The MCX chief further said that higher stamp duty in Maharashtra would reduce profitability of brokerage firms located in the state as their total transaction cost would increase by 200%.
The proposal would also discourage clients from participating in commodity trading in the state.
He observed that the move would make Mumbai, the country's financial capital, the costliest city for trading in commodities besides driving brokerage firms out of the state.
The stamp duty in other states are below Rs 2 per Rs 1 lakh transaction.
