The CTT Tax or Commodities Transaction Tax is levied on Trades made on Commodities Exchanges similar to Securities Transaction Tax – STT on Equity Trades. It is a tax payable to the Central government by commodity traders and hence categorised as a regulatory charge.
CTT was first proposed in 2008, the proposal met with vigorous opposition from Commodity Exchanges. They disputed that Commodity trading in India was at an emerging stage & introduction of CTT could unfavourably affect them. Hence the plan was withdrawn.
CTT was proposed again the Budget in 2013, but only on Non-Agricultural Commodities such as Gold, Silver, Aluminium, Crude Oil among others. This time the Bill was passed & CTT was levied on Trades in Commodity Futures on & after 1 July 2013.