CBDT told to clarify on STT on physically-settled derivative contracts

The Securities Appellate Tribunal (SAT) on Thursday asked the income tax department to provide clarity on applicability of securities transaction tax (STT) on physically-settled derivative contracts. 

Responding to an appeal filed by brokers lobby Association of National Exchanges Members of India (ANMI) against NSE and markets regulator Sebi, SAT observed “given the potential adverse effect it would have on the securities market, it is in the interest of justice for the CBDT (Central Board of Direct Taxes) to consider the matter on top priority and provide clarity in the matter, as representations to that effect have been already made both by the NSE and SEBI to CBDT.” 

The comments came after ANMI moved SAT against a circular asking brokers to levy 0.1 per cent STT on contracts being physically settled.