Maharashtra: Panel to examine stamp duty on share transaction

The Maharashtra government has constituted a seven-member panel, including representatives of the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and broker bodies, to re-examine the incidence of stamp duty on deliverable and non-deliverable share transactions.

The panel is also to recommend changes to simplify the current taxation policy.

Confirming this, a senior state government official told Business Standard, "A seven-member panel comprising R Vaidyanath from BSE, Ravi Narain from NSE and with representatives of the broker forums - the Association of NSE Members of India (ANMI), BSE Brokers Forum (BSESBF) - , stamp department and government officials, has been constituted to suggest long term changes in the taxation system. The panel is expected to submit its report within a month."

The NSE and BSE have conceded to the stamp department's demand for a chartered accountant-ratified (CAR) listing of details of the stamp duty payable by the brokers to the stamp department as well as listing of defaulters amongst the broking community.

The NSE and BSE have committed themselves to submitting a list of deliverable and non-deliverable share transactions, for the half year ending on September 2003 within the next few days.

Similarly, the exchanges will provide a CAR statement for the six months up to March 2004 by May 2004 to the stamp department.

The stamp duty and registration department has also in turn submitted a proposal to the state government seeking to continue the lowered stamp duty of 0.002 per cent for 2004-2005.

This proposal comes in the wake of an incremental revenue mop up of Rs 79 crore in stamp duties collected from these transactions on the NSE and BSE in 2003-2004, up to January 1, 2004.

The state department expects the revenue collections under this head to reach Rs 100 crore once data for the last three months (January to March 2004) is compiled.

The state government had collected Rs 52 crore in 2002-2003 from NSE and BSE brokers. The government official told Business Standard, "I would not term the incremental tax mop up in this financial year as substantial. However, it is positive and is in keeping with the trend expected when we had lowered the levy four years back (from 0.02 percent to 0.002 per cent). Improved revenue collection in the current fiscal has given us reason to think positively on continuing the exemption for the next financial year as well."

He added that both exchanges have conceded, apart from providing the CAR listing of transactions, to inform the state stamps and registration department about defaulters. "The two exchanges have undertaken to inform us as well as write to their defaulting members regarding the amount owed to the government by them. They have agreed to monitor the defaulters."