Whether GST will be levied on the exit-load on mutual funds? Exit load in the form of a fee (whether or not as a fixed percentage of the investment) is liable to GST. Even if the exit load is in the form of units in the fund, it may be concluded that the consideration received… Read More »
Stock brokers provide many other services like Depository Participant Services / Portfolio Management Services, etc. Do they require registration as separate Business Verticals? Section 2(18) of the CGST Act, 2017 defines “business vertical” to mean “a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods… Read More »
What is considered as ‘securities’ under the Goods and Services Tax Act? Are they taxable under GST? Section 2(101) of the CGST Act, 2017 defines “securities” to have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956. Section 2(52) of the CGST Act, 2017 defines… Read More »
Can the stock broker continue to issue bills and contracts under the normal Stock Exchange mechanism and issue a monthly tax invoice for the purpose of Goods and Services Tax? The stock broker can issue bills and contracts under the normal Stock Exchange mechanism mentioning the GST amount but will have to issue a tax… Read More »
In the course of stock broking, funds are received from the clients as margin money for trade. Would the same be treated as consideration? In the context of stock broking, funds/ securities are provided by the clients to the stock brokers in advance of the potential orders/ trades that would lead to margin/ settlement obligations.… Read More »
What will be the effect if we have paid (i) Integrated tax instead of Central tax and State tax / Union territory tax? (ii) Central tax and State tax / Union territory tax instead of Integrated tax? Under section 19(1) of the IGST Act, 2017 “a registered person who has paid integrated tax on a supply considered… Read More »
Stock Brokers deal with clients who are not residents of India like Foreign Portfolio Investors, Non Resident Indians, Persons of Indian Origin, etc. Will brokerage earned from such clients who are not resident in India qualify as “export of service” under section 2(6) of the IGST Act, 2017? The stock broker being an intermediary, this situation… Read More »
What is the “place of business” for a stock broker? Section 2(85) of the CGST Act, 2017 defines “place of business” to include: (i) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods… Read More »
Would sub-brokers/ Authorized Persons fall in the definition of “agent” under Section 2(5) of the CGST Act, 2017? What would be the registration requirement for sub-brokers/ Authorized Persons in the context of the Goods and Services Tax Regime? As per Stock Brokers and Sub Brokers Regulation, 1992 issued by SEBI, a “sub- broker” means “any person,… Read More »
Do stock brokers fall in the definition of “intermediary” under section 2(13) of the IGST Act, 2017? Yes. Since stock brokers arrange the supply of securities between two or more persons, stock brokers would be covered by the definition of “intermediary” Q 82 of GST FAQs on Financial Services Sector published by CBIC