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June 14, 2026
The Dispatch

Definition

Commodities Transaction Tax

Commodities Transaction Tax is a levy on the trading of non-agricultural commodity derivatives on recognised exchanges, mirroring the securities transaction tax.

Commodities Transaction Tax (CTT) applies to transactions in specified commodity derivatives — typically non-agricultural ones — on recognised commodity exchanges, paralleling the Securities Transaction Tax in equities. It is collected by the exchange at the time of trade.

For active commodity traders, CTT is a transaction cost that affects strategy economics, much as STT does in equity derivatives. Its scope and exemptions, especially for agricultural commodities, reflect a policy balance between revenue and not burdening farm-linked hedging.

Related terms

  • Customs DutyCustoms duty is the tax levied on goods imported into, or in some cases exported from, India, administered under the Customs Act.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.