Mumbai: India’s commodity markets regulator, Forward Markets Commission (FMC), has sought a withdrawal of the commodity transaction tax (CTT) proposed in the federal budget for 2008/09.
“We want complete withdrawal of CTT,” B.C. Khatua, chairman of FMC, said on the sidelines of a conference on 22 April.
“The regulator, along with the exchanges, have approached the government seeking a complete withdrawal of the CTT as it may promote trading in the grey market and deter big players from entering the domestic futures market,” he said.
“Imposition of CTT will force the market players to enter the grey market and force the larger players to hedge abroad,” Khatua added.
India’s finance minister has proposed a tax of 0.017% to be paid by the sellers of commodity futures in the budget.
The CTT also has a provision of 0.125% tax on purchasers of options and 0.017 % tax on sellers of options.