BAJAJ BROKING
In India, the Commodity Transaction Tax is imposed on commodities trading within the country's exchanges, introduced in 2013 as part of the Finance Act. Similar to the Securities Transaction Tax for stocks, CTT tax applies to various commodity futures on recognized exchanges, encompassing agricultural, non-agricultural, and precious metals.
It's a small percentage tax, calculated on the contract price, paid by both buyers and sellers in futures contracts. Agricultural commodities are exempt to facilitate farmer support and price volatility hedging. CTT targets specific non-agricultural commodities like natural gas, silver, Brent oil, crude oil, and gold, taxing both parties based on contract size, aiming to regulate and generate revenue, while exempting agricultural commodities to aid farmers and traders in hedging against price shifts.
When CTT was introduced, commodities exchanges expressed strong opposition, fearing negative impacts on the growing commodity trading community. They contended that the taxation of commodity trading would reduce market excitement and potentially affect trade volumes. The government's argument for the tax, on the other hand, was to deter excessive speculation and to equalise the treatment of commodities markets and the stock market.
In India, the main goals of CTT involve revenue generation for the government and overseeing speculative trading within the commodities market. While intended to curb undue speculation, critics worry about its effects on trading volumes, market fluidity, and involvement, especially among smaller traders and hedgers. Ongoing discussions revolve around striking a balance between revenue creation and maintaining a thriving, effective commodities market in India.
The Commodity Transaction Tax (CTT) was introduced in India primarily to serve a few key purposes:
While these reasons outline the intentions behind implementing CTT, ongoing evaluations and discussions persist regarding its actual impact on trading volumes, market dynamics, and the overall effectiveness of achieving its intended goals.
The Commodity Transaction Tax (CTT) in India, while aiming to regulate speculation and align commodity markets with equities, sparked debates. Its imposition on non-agricultural commodities trading, taxing both buyers and sellers based on contract size, aimed to curb excessive speculation. However, concerns lingered about its potential impact on market vibrancy and smaller traders. Despite initial resistance from exchanges, the tax stood as a means to generate revenue and foster market stability. Continuous evaluations persist to strike a balance between revenue goals and maintaining an efficient, inclusive commodities market, highlighting the ongoing evolution and scrutiny surrounding the CTT.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only.
Share this article:
Morgan Stanley Acquires 1.4 Crore PNB Housing Finance Shares for ₹1,336 Crore
14 Nov, 2024 | 2 Min. read
Tata Power Commissions 126 MW Floating Solar Project in Madhya Pradesh
14 Nov, 2024 | 2 Min. read
Cipla Receives US FDA Form 483 with Eight Observations at Bengaluru Unit
14 Nov, 2024 | 2 Min. read
Varun Beverages Opens ₹5,500 Crore QIP, Sets Floor Price at ₹594.56
14 Nov, 2024 | 2 Min. read
NTPC Green Energy IPO: Price Band Set at ₹102-108 Per Share
14 Nov, 2024 | 2 Min. read
Commodities Market Today | Gold Falls for Fourth Session, Oil Rebounds on Short-Covering
14 Nov, 2024 | 1 Min. read
Share Market Today | Gift Nifty Indicates Flat Start for Indian Market Amid Mixed Cues
14 Nov, 2024 | 4 Min. read
Gold Rate Today | Gold Prices Fall for Fourth Straight Session Amid Dollar Gains
14 Nov, 2024 | 2 Min. read
Hero MotoCorp Q2 Results FY24-25 Preview | Estimate
14 Nov, 2024 | 1 Min. read
Samvardhan Motherson International Q2 Results FY24-25 Preview | Estimate
14 Nov, 2024 | 1 Min. read
Know NTPC Green Energy IPO Review, Objective & Applying Process
14 Nov, 2024 | 1 Min. read
Hindustan Aeronautics Limited Q2 Results FY24-25 Preview | Estimate
14 Nov, 2024 | 1 Min. read
RBI Launches ULI: Transforming Loan Access
August 27, 2024 | 4 Min. read
Textile Sector in India
September 20, 2024 | 5 Min. read
List of IPOs with DRHPs Filed
November 30, 2023 | 3 Min. read
Aditya Birla Group
September 28, 2023 | 10 Min. read
Bajaj Housing Finance Ltd IPO: Things Smart Investors Need to Know
September 05, 2024 | 4 Min. read
Budget Stock Ideas 2024-2025 | Stocks to Buy Today
July 24, 2024 | 4 Min. read
IPO Eligibility Criteria : Full Details
March 15, 2024 | 6 Min. read
What Is the Lock-In Period in IPOs?
October 18, 2023 | 6 Min. read
Godfrey Phillips Announces 2:1 Bonus Shares
September 16, 2024 | 7 Min. read
Jindal Group- A Comprehensive Analysis
September 27, 2024 | 7 Min. read
Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading