Goods and Services Tax an Initiative of One Nation One Tax System A Boon to Commodity Futures Trading in India

Abstract

GST is the most significant indirect tax reform India has ever had, at least, since independence. It has a deep impact on the economy. The commodity futures market is not out of the preview of GST. The present study is an attempt to examine the effect of GST on commodity futures trading in the country. The study shows that GST is applicable when a futures contract is entered into as well as, more importantly, when a contract goes for settlement with physical delivery of the underlying commodity, the impact of GST becomes further crucial. Unlike the pre-GST era, now several positive impacts of GST are found in commodity futures trading. The market participants can easily claim tax credits, a uniform rate prevails across the country and the compliance in the form of filing of tax return requires to be made to a single authority only. Thus, GST is considered to be a boon to the commodity futures trading in the country.