Commodities Transaction Tax (CTT) Introduced in a Limited Way;
Agricultural Commodities will be Exempt
The Finance Bill 2013 proposes to introduce Commodities Transaction Tax(CTT) in a limited way. Presenting the Union Budget in the Lok Sabha today, the Finance Minister Shri P.Chidambaram said that CTT shall be levied on non-agricultural commodities future contracts at the same rate as on equity futures that is at 0.01 percent of the price of the trade. The trading in commodity derivatives will not be considered as a ˜speculative transaction™ and CTT shall be allowed as deduction if the income from such transaction forms part of business income.
Mr. Chidambaram also said that there is no distinction between derivative trading in the securities market and derivative trading in the commodities market, only the underlying asset is different. Hence, it is time to introduce CTT in a limited way. However, agricultural commodities will be exempt.