Topic Name – Whether transaction in securities be taxable in GST
Securities have been specifically excluded from the definition of goods as well as services. Thus, the transaction in securities shall not be liable to GST.
Meaning of securities
The definition of securities given under Section 2(h) of the Securities Contracts (Regulation) Act 1956. The definition of
securities given under the said provision is as below: “securities” include—
(i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;
(ib) units or any other instrument issued by any collective investment scheme to the investors in such schemes;
(ic) security receipt as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);
(id) units or any other such instrument issued to the investors under any mutual fund scheme;
(ie) any certificate or instrument (by whatever name called), issued to an investor by any issuer being a special purpose distinct entity which possesses any debt or receivable, including mortgage debt, assigned to such entity, and acknowledging beneficial interest of such investor in such debt or receivable including mortgage debt, as the case may be;
(ii) Government securities;
(iia) such other instruments as may be declared by the Central Government to be securities; and
(iii) rights or interests in securities;” Any consideration earned from transaction in the abovementioned securities will be outside the levy of GST.
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About Tabish Ahmad
Tabish Ahmad is an Advocate at Patna High Court works in the area of Corporate Law and Corporate Litigations. Tabish represented many clients in complex legal issues focusing on corporate compliance. As An Advocate it is the duty towards nations to make the citizen and businessmen aware about laws and compliances in order to comply as law abiding citizens.
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