Trade body Confederation of Indian Industry (CII) has opposed the levy of securities transaction tax (STT) on foreign currency futures, whose trading will start on the National Stock Exchange for the first time in India on August 29. Currently, all market transactions on stock exchanges are subject to an STT of Rs 17 per Rs 1 lakh.
CII has appealed to the government to quickly clarify the exact status on the subject keeping the best interest of the market in mind.
“Keeping in mind the challenges of any product, which is priced in the global context and is very sensitive to the cost of trading, CII is of the opinion that STT should not be applicable on the exchange-traded currency futures,” a CII statement said.
The currency futures trade at four decimals and the value of any currency is very price sensitive and therefore imposition of STT will distort market pricing, CII said.
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