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India retains commodity tax as proposed in budget

India retains commodity tax as proposed in budget
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First Published: Wed, Apr 30 2008. 04 13 PM IST
Updated: Wed, Apr 30 2008. 04 13 PM IST
Mumbai: The Indian government has retained the Commodities Transaction Tax (CTT) in the Finance Bill 2008, dashing market hopes of a withdrawal or reduction.
Lok Sabha, India’s lower house of parliament, on Tuesday approved the Congress Party-led government’s federal budget for the fiscal year 2008-09.
The Forward Markets Commission (FMC), which regulates markets and commodity exchanges, was seeking a complete roll-back of CTT, as it was seen eating into futures trade volume.
“It is understood that the proposed CTT has been passed, without any changes,” said a top official with Forward Markets Commission (FMC), who did not wish to be named.
The bill contains a new tax of 0.017% to be paid by sellers of commodity futures. The CTT also has provision of 0.125% tax on purchaser of options and 0.017% for sellers of options.
India’s 24 commodity exchanges had trade of Rs40.66 trillion ($1.02 trillion) for financial year 2007-08.
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First Published: Wed, Apr 30 2008. 04 13 PM IST