Cover Story
A Litmus Test For The Market
When the markets are upbeat, a three per cent hike doesn’t matter. A
volatile situation will change this perception and turn investors nervous,
says Yagnesh Kansara
B
y the time you read
this issue of Outlook
Money, the new indirect
tax regime that was
introduced in India would have
completed one year of its existence.
Yes, we are talking about the
first anniversary of goods and
services tax (GST). Though it is a
work in continuous progress, its
introduction has impacted various
sectors of the economy, and we will
try to analyse its impact on stock
market trading and mutual fund
(MF) investing by the investors.
Market participants say, life
hasn’t changed much after the GST
was introduced in stock market
30
Kamlesh Shroff
Spokesperson, BSE’s Brokers Forum
When interest is paid to a
stock broker, including loans
for Margin Trading, GST is
leviable, thus increasing the
trading cost for the investors
Outlook Money July 2018 www.outlookmoney.com
trading. According to them, the
major change that has come into play
is the three per cent hike in service
tax - up from 15 per cent to 18 per
cent, with other costs remaining
unchanged.
Says Sandeep Chordia, Executive
Vice President, Strategy at Kotak
Securities, “GST has replaced service
tax on brokerage. Service tax was
charged at the rate of 15 per cent,
whereas, now GST is levied at 18 per
cent on brokerage. We don’t think
a three per cent extra charge has
changed the structure dramatically
to affect market volumes. Moreover,
clients who have GST liability can
now set off GST paid on brokerage,