When the markets are upbeat, a three per cent hike doesn’t matter. A volatile situation will change this perception and turn investors nervous, says Yagnesh Kansara.
By the time you read this issue of Outlook Money, the new indirect tax regime that was introduced in India would have completed one year of its existence. Yes, we are talking about the first anniversary of goods and services tax (GST). Though it is a work in continuous progress, its introduction has impacted various sectors of the economy, and we will try to analyse its impact on stock market trading and mutual fund (MF) investing by the investors.
Market participants say, life hasn’t changed much after the GST was introduced in stock market trading. According to them, the major change that has come into play is the three per cent hike in service tax - up from 15 per cent to 18 per cent, with other costs remaining unchanged.
Says Sandeep Chordia, Executive Vice President, Strategy at Kotak Securities, “GST has replaced service tax on brokerage. Service tax was charged at the rate of 15 per cent, whereas, now GST is levied at 18 per cent on brokerage. We don’t think a three per cent extra charge has changed the structure dramatically to affect market volumes. Moreover, clients who have GST liability can now set off GST paid on brokerage, which was earlier not permitted.”
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