Supreme Court to Review Constitutional Validity of Securities Transaction Tax (STT)
The Supreme Court of India has decided to examine the constitutional validity of the Securities Transaction Tax (STT), a levy imposed on transactions executed on domestic stock exchanges.
Key Points of the Examination
- Taxpayer Challenge: The Supreme Court is acting on an appeal challenging a previous Bombay High Court judgment that had upheld the constitutional validity of the STT.
- Nature of the Levy: STT is a direct tax introduced in 2004, charged on the value of securities transactions (such as the purchase or sale of equity, mutual funds, and derivatives) executed through recognized stock exchanges.
- Legal Grounds for the Challenge: The challenge essentially questions the Central Government’s legislative competence to impose this tax and argues that the levy may violate constitutional provisions related to taxation powers.
- Significance: The Supreme Court’s decision to admit the appeal indicates the seriousness of the issue, which affects virtually every investor and trader engaging in the Indian securities market.
Source :- The Hindu