FMC, commexes expect withdrawal of CTT

The Forward Markets Commission (FMC), along with commodity exchanges, expect that Finance Minister Pranab Mukherjee will drop the yet-to-be-notified commodity transaction tax (CTT) in his Budget.

The Forward Markets Commission (FMC), along with commodity exchanges, expect that Finance Minister Pranab Mukherjee will drop the yet-to-be-notified commodity transaction tax (CTT) in his Budget.

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CTT was announced on the lines of security transaction tax in the 2008-09 Budget by the then Finance Minister P Chidambaram but was not notified following stiff opposition from regulators and exchanges.

Even the Consumer Affairs Ministry was not in favour of imposing CTT as it felt this tax would hurt the growth of commodity futures markets.

"We are hoping that on Monday, there will be some clarity on CTT. Ideally, we want the tax to be withdrawn forever," National Multi Commodity Exchange (NMCE) Managing Director Kailash Gupta told PTI.

The commodity market regulator Forward Markets Commission (FMC) chief B C Khatua said, "We have sought withdrawal of CTT and we hope it is considered in the current Budget."

The Economic Survey too favoured removing CTT.

NCDEX Spokesperson Madan Sabnavis said, "We are hopeful that CTT will not be implemented as the government is keen on the growth of the commodity markets."

In last year's Budget, the government had proposed 0.017 per cent as CTT (Rs 17 for every Rs one lakh trade on commodity exchanges).