BSE Limited

Master Circular March 2018 Finance and Accounts Department

April 2, 2018

Dear Sir / Madam,

Sub: Master Circular for trading members / customers

The Finance department of BSE has issued various notices / circulars from time to time on subject matter such Direct , Securities Transactions Tax, Members TDS refund etc. In order to enable the users to have an access to all the applicable notices / circulars at one place, a Master Circular in regards has been prepared.

This Master Circular is a compilation of the notices / circulars issued by the Finance & Accounts Department of BSE up to March 31, 2018.

In case any additional clarification / guidance is required, you may contact Mr. Harihara Subramanian on 2272 8522 and [email protected].

For and on behalf of BSE Limited.

Girish Amesara Nimeshkumar Mistry Financial Controller Deputy General Manager Finance & Accounts Finance & Accounts Date: April 3, 2018 BSE Limited Finance and Accounts Department Master Circular March 2018 Finance and Accounts Department

CONTENTS

I. Matters ...... 3 1. Non deduction of TDS on GST on services element of Tax Invoices ...... 3 2. Amendment of Rule 6DDA with respect to transactions on Stock Exchange...... 3 3. Notification of BSE as a recognized Stock Exchange under clause (d) of the proviso to clause (5) of Section 43 of the Income Tax...... 4

II. Securities Transaction Tax ...... 5 1. Securities Transaction Tax (STT) Rates...... 5 2. STT on Institutional Transactions...... 6 3. Remittance of Excess STT collected by Members...... 7

III. GOODS AND SERVICES TAX ...... 8 1. Circular on applicability of Goods and Services Tax...... 8

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I.DIRECTTAXMATTERS

1. Non deduction of TDS on GST on services element of Tax Invoices

As per CBDT Circular No: 23/20017 dated July 19, 2017 read with No 1/ 2014 dated January 13, 2014, wherever in terms of the agreement/contract between the payer and the payee, the ‘GST on services’ component comprised in the amount payable to a resident is indicated separately, tax is required to be deducted at source under Chapter XVII-B of the Act on the amount paid / payable without including such GST on services component. GST for these purpose shall include Integrated Goods and , Central Goods and Services Tax, State Goods and Services Tax and Union Territory Goods and Services Tax.

2. Amendment of Income Tax Rule 6DDA with respect to transactions on Stock Exchange

CBDT Notification No. 14/2011 dated 9th March, 2011/F.No.142/25/2008-SO (TPL) has amended Income-tax Rule 6DDA effective from 01st April, 2011 as follows - “1. The Stock Exchange shall ensure that transactions (in respect of cash and derivative market) once registered in the system are not erased; and 2. The Stock Exchange shall ensure that the transactions (in respect of cash and derivative market) once registered in the system are modified only in cases of genuine error and maintain data regarding all transactions (in respect of cash and derivative market) registered in the system which have been modified and submit a monthly statement in Form No. 3BB to the Director General of Income-tax (Intelligence), New Delhi within fifteen days from the last day of each month to which such statement relates to.”

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3. Notification of BSE as a recognized Stock Exchange under clause (d) of the proviso to clause (5) of Section 43 of the Income Tax

BSE is notified as a recognised Stock Exchange for the purpose of clause (d) of proviso to clause (5) of Section 43 of the Income Tax Act, 1961 w.e.f. 25th January 2006. Accordingly, Derivative carried out on the Exchange trading platform will not be deemed to be speculative transaction till such time the recognition granted to the Exchange is not withdrawn.

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II.SECURITIESTRANSACTIONTAX

1. Securities Transaction Tax (STT) Rates

Securities Transaction Tax (STT) was introduced in Chapter VII of the Finance (No. 2) Act 2004. The same is chargeable as per the rates given below - Sr. Taxable Securities Transactions Effective Effective Payable No. till from by 31.05.16 01.06.16 1. Purchaseofanequityshareinacompany,where 0.1% 0.1% Purchaser – (a) the transaction of such purchase is entered into in a recognised stock exchange; and (b) the contract for the purchase of such share is settled by the actual delivery or transfer of such share.

1.A Purchase of an unit of an equity oriented fund, NIL NIL - where -

(a) the transaction of such purchase is entered into in a recognised stock exchange; and

(b) the contract for the purchase of such unit is settled by the actual delivery or transfer of such unit. 2. Saleofanequityshareinacompany,where- 0.1% 0.1% Seller (a) the transaction of such sale is entered into in recognised stock exchange; and (b) the contract for the sale of such share is settled by the actual delivery or transfer of such share.

2A. Sale of an unit of an equity oriented fund, where 0.001% 0.001% Seller -

(a) the transaction of such sale is entered into in a recognised stock exchange; and

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Sr. Taxable Securities Transactions Effective Effective Payable No. till from by 31.05.16 01.06.16 (b) the contractfor thesale ofsuchunitissettled by the actual delivery or transfer of such unit.

3. Saleofanequityshareinacompanyoraunitof 0.025% 0.025% Seller an equity oriented fund, where -- (a) the transaction of such sale is entered into in a recognised stock exchange; and

(b) the contract for the sale of such share or unit is settled otherwise than by the actual delivery or transfer of such share or unit.

4. (a)Saleofanoptioninsecurities. 0.017% 0.050% Seller (b) Sale of an option in securities where option 0.125% 0.125% Purchaser is exercised. (c) Sale of a futures in securities. 0.01% 0.01% Seller

2. STT on Institutional Transactions

All institutional Buy and Sell transactions are treated separately for the calculation of STT and all these transactions are treated as delivery based transactions. No netting of institutional transactions is allowed for the calculation of STT and the STT applicable on delivery based transactions is being levied on such transactions.

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3. Remittance of Excess STT collected by Members

This has reference to notice no. JCIT/Range 7(2)/STT Asst. /2015-16 dated 13.10.2016 issued by Joint Commissioner of Income Tax, Range – 7(2), Mumbai. This notice was issued to draw attention towards excess STT collected by some brokers/sub-brokers, which is not being remitted to the Government account.

Hence, as per the instructions of the income tax department, a circular is hereby issued to the member brokers, requesting to furnish details of excess STT collected and retained with them for FY 2014-15 and for preceding years as on 31.03.15 directly to the below mentioned address:

O/o The Joint Commissioner of Income Tax Range-7(2), Room No 625, 6th Floor, Aayakar Bhavan, M.K. Road, Mumbai – 400020

The letters may be captioned as ‘Excess STT Retained – BSE’. The details pertaining to the above mentioned subject has to be submitted to the above mentioned address within 15 days from the date of issue of this circular. Also, the excess amount so collected needs to be remitted to the Government Account immediately.

In case of any clarification, trading members may contact the following official on the telephone number and email id given below

Mr. Harihara Subramanian Tel.No.022 2272 8522 Email ID: [email protected]

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III.GOODSANDSERVICESTAX

1. Circular on applicability of Goods and Services Tax

Goods & Service tax (GST) has been introduced w.e.f 01.07.2017 and is applicable on all supplies of goods and services. The exchange will levy GST at the rate applicable on the supplies, as notified by the respective authorities. Under GST, credit claim is on the concept of online matching of transactions, which is linked with the GST Identification Number (GSTIN) and other invoice details. Therefore, all listed entities, Trading Members and other Customers are requested to intimate their GSTIN as allotted to them by the respective authorities in order to claim input . The exchange shall not entertain any request for any updation / change in the GSTIN details of the entity, once the invoice is issued. In case GSTIN provided at the time of raising invoice is incorrect, the transaction will be classified as B2C and the listed entity will not be eligible to claim credit.

For further clarifications on the subject matter you may kindly contact the following officials:

Type of Query Contact Person Department Direct Line Billing and Ms. Farzana Mehta Unified 2272 8527 Outstanding Related Commercials queries Ms. Jyotsna Unified Business 2272 5085 Sukumaran Commercials Taxation Related Mr. Harihara Finance & 2272 8522 Queries Subramanian Accounts Finance & 2272 8088 Ms. Mita Kothari Accounts

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