The Commodity Transaction Tax (CTT) on the futures market, against which there was an intense lobbying within and outside the government since the presentation of the Budget, is here to stay.
Rejecting the demand for withdrawal of CTT, Finance Minister P Chidambaram today said in the Rajya Sabha that "I am an old war horse in this game, we will live with this criticism".
As the stock brokers have accepted the Securities Transaction Tax (STT), the traders in commodity futures market will also accept the new tax, the Minister said.
The Budget had proposed to levy 0.017 per cent CTT on transactions in the commodity futures trade, which runs into lakhs of crores of rupees.
With the government completing the budgetary process there is no scope of withdrawal of the tax proposal which was vehemently opposed by the commodity exchanges.
The new tax proposal saw competing commodity exchanges coming on a common platform and jointly meeting several ministers including Agriculture and Consumers Affairs Minister Sharad Pawar to pursue their demand for withdrawal of CTT.
BJP leader Jaswant Singh also questioned the rationale behind imposition of the tax.
"We are disappointed with the development. This will affect volumes of the commodity exchanges as increased cost will discourage traders from participation," said MCX managing director Joseph Massey.