MCXCCL GST Circular, MCX, IBJA: In a significant development, MCXCCL, the clearing corporation of India’s leading commodity derivatives exchange MCX, has withdrawn its earlier circular on the collection of GST at the buyer and seller ends for those taking delivery from the exchange platform. This decision comes in the wake of strong opposition from the India Bullion and Jewellers Association (IBJA).
A detailed meeting involving the CPAI team, physical delivery members, and MCX leadership addressed the GST concerns, followed by a Members Advisory Committee meeting. Subsequently, a decision was reached to withdraw the earlier circular issued by MCX on GST.
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The new circular, issued on December 19, outlines a modified procedure. According to the updated guidelines, MCXCCL will now facilitate the collection and remittance of dues between the buyer and seller. For the collection of GST, the buying Clearing Member’s account will be debited, and the corresponding amount will be credited to the selling Clearing Member’s account. Once this transaction is complete, MCXCCL will not entertain any matters related to the payment of GST and cannot be made a party to disputes arising between the buyer and seller for trades conducted on MCX.
The New Circular issued on 19 December 2023 Said ”The modified procedure is given as follows:
Collection and payment of dues:
Based on the feedback received from market participants, MCXCCL will facilitate collection and remittance of dues between Buyer and Seller as follows:
a) For collection of GST, MCXCCL will debit buying Clearing Member’s account
and the said amount will be credited to selling Clearing Member’s account.
b) Once the amount is credited to the Selling Clearing Member, the process will
be considered as complete and MCXCCL shall not entertain any matter related
to payment of GST and MCXCCL cannot be made a party to such disputes.
c) The Buyer or Buying Clearing Member will have no recourse to MCXCCL or
cannot make MCXCCL party to any dispute on GST arising between Buyer and
Seller for trades done on MCX.
Importantly, the buyer or buying Clearing Member will have no recourse to MCXCCL or the ability to involve MCXCCL in any GST-related disputes between the buyer and seller. Gold Price Today possesses a copy of the recently issued circular.
This revision marks a departure from the previous circular, which had placed the responsibility of collecting goods and services tax (GST) on the seller and buyer for transactions conducted on the exchange platform. Before this change, MCXCCL facilitated the payment of GST from the buyer to the seller through the exchange’s clearing members. With the latest circular, effective December 29, sellers are now mandated to directly collect GST from the buyer.
Previously, when a jeweller purchased a gold bar on the exchange platform, they paid the seller the settlement price on a T+1 basis. Subsequently, the jeweler had to pay 3% GST on gold to the seller on the second day after the settlement of the trade, before removing the goods from the exchange vault. This was facilitated by MCXCCL through the respective clearing members of the buyer and seller. The revised procedure maintains the process of delivery-related document submission. Now after revision this system will followed by MCXCCL.
