CTT on non-farm products from July 1

Commodity Transaction Tax (CTT) at 0.01 per cent will be levied on various non-agricultural commodities, including gold, sugar and edible oils, with effect from July 1.

Notifying the CTT today, the Finance Ministry said 23 agricultural commodities, including wheat, barley, chana, cotton and potato, would be exempted from the levy.

The tax would be levied on futures trading and not on spot trading in the commodities.

Besides gold, silver, crude oil and base metals, processed farm items like sugar, soya oil and guar gum will come under CTT, it said.

Coriander, cardamom and guar seed is also out of the CTT.

In the 2013-14 Budget speech, Finance Minister P Chidambaram had said that CTT will be levied on non-farm items at the rate of 0.01 per cent and would be paid by the seller.

Sources said the implementation of CTT has been delayed as there has been consultations between the stakeholders and the Finance Ministry over the list of non-agri commodities to be brought under the ambit of CTT.

The exchanges and brokers are of the view that CTT would discourage day-traders and speculators, resulting in a big drop in business of five national bourses.

There are 22 commodity bourses in the country, of which six of them operate at national level. The combined turnover of these bourses stood at Rs 170,46,840 crore in 2012-13, down by six per cent from the previous fiscal.

Of the total turnover, more than 80 per cent comes from non-agricultural commodities.