Synopsis of CTT Impact and Expectation from Budget 2015-16

Feb. 25, 2015 - PRLog -- On the threshold of the countdown to the Union Budget for the session 2015-16, there is a mix and match of speculations and expectation in the minds of the investors. As the prospective investors and traders associated with the commodity derivatives market look forward to the formal announcement, there are high expectations to see some major alterations with the Forward Contracts Regulation Act (FCRA).

In the upcoming Union Budget, the major eye will be some of the most impacting factors including allocation of funds on different developmental and infrastructural projects, tax structure, subsidy burden issues, and industrial policies among the prime determinants of the market scenario. It will be interesting to see the plans implemented by the new Government on the investment succession in its attempt to recover from the present market crisis.

The overhaul in the market among the investors with prime attention demanding the abolition of the Commodities Transaction Tax (CTT) imposed in 2013, there will be high anticipation to see the abolition or at least a reduction that will highly influence the trading of eminent commodities. At present, the CTT is imposed on bullions, metals, and a range of agro products. The exemptions are likely on the essential agro-based products like sugar, soya oil etc. As for the metals, the investors are highly hopeful of getting some relief on the gold imports that is 10% at present.

In the present scenario of reduced crude oil prices in the global market, the Indian economy is expected to gain pace with the fiscal balances and revival. The imposition of 5% customs duty is likely to target over $3 billion revenue generation targets. The imported oil is also exempted from the imposition of the central sales tax, which is 2% for domestic crude products.

Whatever be the outcome of the announcements on February 28, the experts predict that the stock market would have a highly volatility with great fluctuations are likely. Opening at 9.00 am is exceptional on Saturdays for the stock trading market when it is generally closed. However, the key players in determining the condition will be the investment from foreign investors, crude oil price, strength of the Indian currency against top global frontrunners etc. The new government is likely to eye fiscal consolidation and assort initiatives for economic growth and revival.

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