Govt scraps Commodity Transaction Tax

The government on Monday abolished the Commodity Transaction Tax (CTT) that was announced in the Budget last year, but was yet to be implemented and the commodity exchanges rejoiced the decision.

Finance Minister Pranab Mukherjee announced the scrapping of the CTT while presenting the Budget for 2009-10.

He said the decision is in step with the recommendation of the Prime Minister's Economic Advisory Council. 

Echoing the sentiment, the country's third-largest commodity bourse NMCE MD Kailash Gupta said, "We are grateful to the government for considering our request. Dispelling earlier confusion, today's move brings clarity that the CTT won't be implemented".

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