Q.

Who is a Stock Broker? When does the service provided by Stock Broker become liable to pay Service Tax?

Ans. Stock Broker is a person who has either made an application for registration or is registered as a stock broker under the rules and regulations of Securities and Exchange Board of India Act, 1992. The service provided by the stock broker becomes liable to levy of when a. b. c. d. Stock Broker is registered as per SEBI Act, 1972. Stock is listed in the Stock Exchange. The Stock Exchange is recognised Stock Exchange as per Securities Contract (Regulation) Act, 1956. The Sale/Purchase are on behalf of an investor.

Q.2

What is the value of taxable service in case of service provided by Stock Broker?

Ans. The value of the taxable services, provided by a Stock Broker, is the aggregate of the commission or brokerage charged by such broker on the sale or purchase of securities from the investors and includes the commission or brokerage paid by the broker to any sub-brokers. Q.3 Are there any transactions/charges undertaken/received by Stock Broker which are not chargeable to Service Tax? If so which are those transactions?

Ans. Following transactions undertaken by the Stock Brokers do not attract the levy of Service Tax :a. b. c. d. e. f. Private placement charges, Public issue consultancy fee, Brokerage for primary market operations, Stock Brokers own transaction. Jobbing business. Arbitrage.

Q.4

Is a Stock Broker required to have separate registration for each of the offices when all offices are not falling within the same Commissionerate?

Ans. No, a Stock Broker registered with a particular Stock Exchange has to apply for registration with the Commissioner of Central Excise having jurisdiction over the place in which the concerned Stock Exchange is situated, irrespective of whether all the offices of the Stock Broker are situated within or outside the jurisdiction of the said Commissionerate. Q.5 Ans. Whether a suspended share broker should continue to hold registration or should surrender the registration ? a. b. When a registered assessee ceases to carry on the service for which he is registered, he should surrender his registration certificate immediately to the Central Excise authority. A suspended share broker can continue to hold registration, if he so desires, but he should then file NIL return to the Central Excise authority