Comments
With Maharashtra harmonising stamp duty for all categories of commodity and stock transactions, thereby increasing the duty on most transactions, it is only a matter of time before more and more broking outfits in the State shift to other States.
Clients of brokers who have registered offices in Maharashtra would have to shell out more in terms of stamp duty once next year's State budget is notified. The State will levy a uniform stamp duty of Rs 5 per lakh of turnover or 0.005 per cent on all cash and derivative transactions, both delivery and non-delivery based.
Transactions in both the stock and commodity exchanges will be taxed thus. With this, all transactions barring delivery-based equity market transactions will become costlier.
“The important point that the Finance Minister is missing is that not every transaction is speculative in nature and it is a matter of time before more and more broking outfits shift their registered offices lock stock and barrel outside the State,” said Mr Arun Kejriwal, Founder, KRIS Research.
The State Government believes that speculation is injurious to the health of the investor and has therefore levied uniform stamp duty across all segments, he said.
In his budget speech, the Deputy Chief Minister of Maharashtra, Mr Ajit Pawar, who also holds the finance portfolio said, “Currently, differential rates of stamp duty are being charged at different rates of stamp duty. This makes the collection of duty complicated. It is now proposed to charge a uniform stamp duty of 0.005 per cent on all these transactions. This will simplify levy of duty.”
Already, there are various instances of broking firms shifting their back office operations to Delhi, Tamil Nadu, Andhra Pradesh and the Union territory of Daman & Diu. Experts fear that Maharashtra will lose out on stamp duty collections as more entities register themselves in other States to save on the levy.
Experts said that client-broker agreements were charged stamp duty at a minimum of Rs 100 per document in Maharashtra. The duty is levied to validate the documentation done as part of any deal or transaction that occurs in the State.
Section 17 and Section 18 of the Stamp Duty Act stipulate that all the instruments executed in the State shall be stamped before or at the time of execution or immediately thereafter or on the next working day following the day of execution.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.