QUESTION

I earned profit of Rs. 500000 in D’mat Commodity Trading of coriander seeds through MCX. Is this profit liable to G.S.T.? If yes, at what rate? Whether at commodity rate or 18%? Does it make any difference for the purpose of taxability, whether I get delivery of the goods or not?

ANSWER

Facts of the Case: Applicability of GST on profit earned  in D’mat Commodity Trading  through MCX.

Law Applicable:

SECTION 2 OF CGST ACT
(52) 'goods' means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply;

(102) 'services' means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;

Interpretation: Commodity trading in electronic form is considered as transaction in securities. Transaction in securities is specifically excluded from the definition of goods as well as services and thus not considered as supply in GST as per section 7 of CGST Act. Therefore GST is not applicable on profit earned on Commodity trading.  

Conclusion: GST is not applicable on profit earned in D'mat Commodity trading through MCX. (Reply dt.01.10.2020)