New Delhi: The much-opposed commodities transaction tax, which is to be imposed on futures and options deal on commodity exchanges, would be notified in due course, a senior finance ministry official said.
The government had introduced CTT on the lines of Securities Transaction Tax (STT) in budget 2008-09. The decision has been opposed by sector regulator FMC, commodity bourses and brokers as they foresee negative impact of the decision on commodity market.
Even the Prime Minister’s Economic Advisory Council was not happy with the proposal and had suggested the government should at least lower the rate of CTT from the proposed 0.017%.
While presenting the budget for 2008-09, Finance Minister P Chidambaram had said: “Transaction in commodity futures have come of age. Hence, I propose to introduce CTT on the same lines as STT on options and futures”.
CTT is proposed to be levied on taxable commodity transactions -- those of purchase and sale -- of an option in goods or an option in commodity derivative or any other commodity derivative entered in a recognised association.
According to the proposal, a seller would pay 0.017% CTT on option premium if he sells an option in goods or an option in commodity derivative. For the sale of any other commodity derivative, the seller would pay 0.017% of the price at which commodity derivative is sold.
The purchaser would be charged 0.125% on the settlement price of the option if he sells an option in goods or option in commodity derivative, where option is exercised.