Finance Minister Pranab Mukherjee announced the scrapping of the CTT while presenting the Budget for 2009-10. He said the decision is in step with the recommendation of the Prime Minister's Economic Advisory Council.

The Government had proposed 0.017 per cent as the CTT (Rs 17 on the transaction value of every Rs one lakh trade on commodity exchanges).

The CTT was announced in line with the Security Transaction Tax (STT) in the 2008-09 Budget by then Finance Minister P Chidambaram but was not notified following stiff opposition from regulators and exchanges.

Reacting to the decision, commodity market regulator FMC Chairman B C Khatua said, "We are very happy for industry."

Expressing satisfaction, a spokesperson with the country's largest commodity exchange MCX said, "Thanks to the Government for taking the decision. This will make the domestic market more efficient to compete globally and risk management will become more effective."