Commodity transaction tax (CTT) a levy on commodity futures and options, is unlikely to be imposed in the forthcoming budget as industry bodies mounted pressure against it saying this would depress the market where the volumes are falling.

Industrial bodies such as Assocham, Ficci, The Delhi Bullion and Jewellers Welfare Association and Commodity Participants Association of India (CPAI) have written letters to the finance minister Pranab Mukherjee raising concerns against the proposal to impose CTT on transactions in the commodity exchanges.

A finance ministry official said the it is unlikely that CTT would be imposed that too at a time where there is a demand for abolition of securities transaction tax, a levy on equity transactions in the stock exchanges.

The industrial bodies were demanded abolition of STT during the pre-budget consultations with the finance minister saying it was adding to the woes in a bearish capital markets. NIPFP director M Govinda Rao who also attended the meeting said if STT was not abolished, there should be tax on transations in all other markets included CTT in commodity exchanges to provide a level playing field.

The industry bodies feel imposition of CTT would hamper commodities trading market and impact the overall economy and add additional burden to commodities market that are subject to many taxes and levies such as Mandi fee, sales tax/ value added tax (VAT), central sales tax (CST), excise, customs and octroi.

“I have not received any response to the letter, but we expect a positive response from the minister and government, hoping them to remove CTT,” secretary general, Ficci, Rajiv Kumar told Financial Chronicle on Tuesday.