NSE CEO Vikram Limaye requested Finance Minister Nirmala Sitharaman and SEBI chief Ajay Tyagi to lower taxes on market trading. “Incidence of multiple taxes from STT, capital gains, stamp duty and GST on capital market transactions is affecting India’s competitiveness,” Limaye said. Meanwhile, Tyagi said exchanges should not misuse their oligopolistic position to charge “exorbitant” fees.
He made a request to finance ministry and Securities and Exchange Board of India or Sebi to examine the transaction costs.
“I request Honourable Finance Minister and Chairman of SEBI to examine the overall transaction costs including taxes, margins and compliance costs to improve competitiveness of Indian markets,” Limaye said.
India is one of the few jurisdictions which charges capital gains in form on Long Term Capital Gains (LTCG) on trading in Indian markets, this is in addition to Securities Transaction Tax (STT). These taxation on marginal rate adds to increase compliance costs.
To foreign investors this is also a permanent costs as any taxes they pay in India cannot be offset in their home country as they are anyway tax-exempt. Limaye’s statement assumes importance in the backdrop of increased pitch for reducing taxes on market trading after the government moved to reduce the taxes on India Inc.