Uniform Stamp Duty on Securities Market Instruments from 1st July
The amendments in the Indian Stamp Act, 1899, to bring about uniformity of the stamp duty on securities across states will come into effect from Wednesday 1st July.
 
The Centre has created the legal and institutional mechanism to enable states to collect stamp duty on securities market instruments at one place by one agency, through the stock exchange or clearing corporation authorised by it or by the depository on one instrument, an official statement said.
 
The amendment was brought for ease of doing business and bringing in uniformity of the stamp duty on securities across states thereby building a pan-India securities market, it said.
 
The amendments to the Stamp Act, 1899, introduced in the Finance Bill, 2019, introducing the centralised system of stamp duty with a unified rate for all financial securities transactions were to become effective from 9th January first but it was later shifted to 1st April. On 30th March, the government decided shift its implementation to 1st July due to Covid-19 related lockdown across the country.
 
As per the amendments and the new notification, stock exchanges will now collect stamp duty for trading in securities at a unified rate from July 1 and deposit the proceeds with the Centre, which will then divide it among states where the trade took place.
 
At present, market participants collect stamp duty at rates fixed by the state where the trade takes place and deposit it with the local government. This created a complex system with multiple tax rates and differing regulations in different states, posing a challenge to settle deals.
 
Under the amended provisions while stock exchanges or clearing agencies would collect duty on securities transactions (sale and purchase of shares) and deposit it with the centre, for transactions that don't happen on the stock exchange (off market transactions) platform, the depositories would collect stamp duties.
 
Under the unified stamp duty system the rate of duty has been proposed at 0.0001 per cent for transfer and reissue of debentures while rates varies from 0.0005 per cent to 0.015 per cent for other financial securities transactions rated to shares, or derivative products.
 
"The relevant provisions of the Finance Act, 2019 amending the Indian Stamp Act, 1899 and the Indian Stamp (Collection of Stamp Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019 were notified simultaneously on 10th December, 2019 and these were to come into force from 9 January 2020, which was later extended to 1 April 2020 vide notifications dated 8 January 2020," a finance ministry statement said.
 
Considering the stakeholder requests, the nation-wide lock-down and in line with the relaxations given on other statutory and regulatory compliance, the date for implementation was further extended to 1st July. it added.
 
As per the government, this rationalised and harmonised system through centralised collection mechanism is expected to ensure minimise cost of collection and enhance revenue productivity.
 
Further, this system will help develop equity markets and equity culture across the length and breadth of the country, ushering in balanced regional development, the statement added.
 
Sector experts, however, say that with the implementation of the amendment, investments in new fund offers (NFOs) or primary issues either through direct investments or investments through indirect routes like mutual funds (MFs) would become expensive.
 
After the implementation, stock exchanges or authorised clearing corporations and the depositories will be the collecting agents.
 
For all exchange based secondary market transactions in securities, stock exchanges shall collect the stamp duty, and for off-market transactions, which are made for a consideration as disclosed by trading parties, and initial issue of securities happening in demat form, depositories shall collect the stamp duty.
 
The regulators, RBI and SEBI have been authorised by the Centre under the Indian Stamp Act, to issue clarificatory circulars and operational guidelines on specific issues to ensure smooth implementation from 1st July.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    NSE Pulls Plug from its NOW Trading Software; 63 Moons' Offers Its Odin at 50% Discount
    After the National Stock Exchange (NSE) reportedly decided to pull the plug from its trading software Neat on Web (NOW), 63 Moons Technologies Ltd has offered its software Odin to brokers at 50% discount.
     
    In a release, 63 moons says, "Odin, which holds about 70% of the retail broking market share in trading software, has decided to provide a discount of 50% on its pricing and technological support to enable smooth transition of trading terminals from NSE’s NOW and to ensure business continuity in this hour of crisis."
     
    According to a report from The Hindu BusinessLine, nearly 12 years after it started offering stock brokers free connectivity to its trading platform, NSE has decided to discontinue its proprietary software NOW. 
     
    Quoting sources, the report says, on Monday NSE had called up several brokers to say that it will shut NOW in 90 days. NSE told the newspaper that exchanges world over publish only APIs for developing customised software that suit each broker’s need. "NSE too is giving APIs to build appropriate solutions for brokers. We believe time has come for the exchange to step back from front-end software,” the report says.
     
    Commenting on the development, Keshav Samant, chief executive (CEO) for brokerage technology solutions at 63 moons' says, “We are committed to serve the financial markets by making Odin as a more user-friendly product remains unwavering. We are continuously working at making Odin a more innovative platform with cutting-edge solutions."
     
    NSE has more than 800 trading members, of which at least a third survived only on NOW. The software has suffered some technical issues in the past. Two years ago, NSE NOW was shut for brokers and sub-brokers for some time. NSE was hit by a technical glitch in NOW during 2017 as well, when trading was halted for three hours.
     
    NSE NOW, the licensed trading software offered direct connectivity to the NSE for trade execution and data feeds through trading terminals, Web-based browsers and mobile devices.
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    BSE invites investors' claims against Grovalue Securities and Vineet Securities
    BSE Limited has invited claims from investors against two
    stockbrokers—Grovalue Securities and Vineet Securities—who have been declared as defaulters and also expelled from the exchange.
     
    The NSE has already expelled them and declared them as defaulters.
     
    "Investors having outstanding claims against Grovalue Securities and Vineet Securities are advised to file their claims with the exchange, if they so desire, within 90 days from the date of issue of this notice," the BSE said.
     
    The eligible claims filed before the specified period will be considered for compensation from the Investor Protection Fund (IPF) to the maximum extent of Rs 15 lakh per client.
     
    Grovalue Securities Pvt Ltd describes itself as a leading equity and commodity services company in India offering diversified brokerage services that includes equity, derivatives, commodities, NRIs mutual funds, offline trading, demat account, insurance and currency services.
     
    The company has offices located in Ahmedabad, Amritsar, Aurangabad, Chennai, Indore, Jaipur, Nagpur and Mumbai's Vile Parle. The company's registered address is in Chennai.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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