INSUBCONTINENT EXCLUSIVE:
Mumbai: The Central Board of Direct Taxes (CBDT) today told the Bombay High Court that 0.10 per cent securities transactions tax (STT) would
be levied on physical delivery of shares in the equity derivatives segment.
A division bench of justices B R Gavai and M S Karnik had last
week sought clarity from the CBDT on the STT rate after the Association of National Exchange Members of India (ANMI) filed a petition
claiming anomalies on the issue.
The ANMI had challenged a July 17 circular issued by the National Stock Exchange (NSE) directing the
members in the equity derivatives segment to collect the STT on physical settlement of stock derivatives at the rate of 0.10 per cent with
effect from July 26.
The circular had added that if the CBDT issued any clarification or amendment on taxation of physically settled FO
contracts, the exchange would recover such additional tax burden from the members.
The ANMI, a brokers' association, claimed in the petition
that this was leading to an ambiguous situation.
The NSE seeking to "illegally" pass on a burden of any additional taxation is "illegal and
arbitrary", it said.
The high court had then directed Additional Solicitor General Anil Singh, appearing for CBDT, to clarify.
Singh today
submitted a communication addressed by the CBDT which said that the rate of 0.10 per cent would be levied as STT on all transactions
including physical delivery of shares in the equity derivatives segment.
"We find that the CBDT clarification takes care of the situation
All the stakeholders including the petitioner association and the NSE are now aware of the STT payable
Hence it would not be difficult for the petitioner association to recover money from the traders," said Justice Gavai.
The bench disposed of
