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5-Exemption of GST On Sale and Purchase of Securities.

The document discusses GST applicability for securities traders. It states that trading in shares and securities is not considered a supply under the GST Act and traders are not required to register for GST. However, brokers earning income from brokerage on securities trades must register if the threshold is met. It also notes that aggregate turnover for GST registration should not include trading turnover from securities as securities are excluded from the definition of goods and services. Expenses incurred on securities trading like brokerage can be claimed against income tax.

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1K views1 page

5-Exemption of GST On Sale and Purchase of Securities.

The document discusses GST applicability for securities traders. It states that trading in shares and securities is not considered a supply under the GST Act and traders are not required to register for GST. However, brokers earning income from brokerage on securities trades must register if the threshold is met. It also notes that aggregate turnover for GST registration should not include trading turnover from securities as securities are excluded from the definition of goods and services. Expenses incurred on securities trading like brokerage can be claimed against income tax.

Uploaded by

Arvind
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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5- Exemption of GST for Traders in Shares

and Securities
GST applicability for Securities Traders
The GST Act specifically excludes Securities from the definition of Goods. As per Section 2(52), Goods
mean any movable property except money and securities. The definition of Services means anything other
than goods, money, and securities. Thus, trading in shares and securities is not considered supply as per the
GST Act and falls outside the purview of GST. Therefore, securities traders are not liable to register under
GST.
However, it is important to note that if a broker is earning brokerage income from securities trading, GST
registration is mandatory if such brokerage exceeds the threshold limit.

Should I include Trading Turnover in Aggregate


Turnover?
Trading Turnover is the turnover calculated for each trading segment as per the reporting requirements of
the Income Tax Act.
Aggregate Turnover includes the sum of the sale of goods and services. Since the definition of goods and
services excludes securities, the aggregate turnover should not include trading turnover to determine the
applicability of GST Registration.
Trading Expenses on Securities Trading
Expenses incurred on trading in securities also include CGST, SGST, or IGST. This is the GST on
expenses such as brokerage, transaction costs, turnover fees, etc that the trader pays for transactions.
The trader can claim such expenses against the income from trading while filing the Income Tax Return.
GST for Traders – Reporting in ITR-3
Turnover as per ITR must match with sales reported in the GST Return to avoid any mismatch notice. If the
trader does not have GST Registration, they need not report details of GSTIN in the Income Tax Return. If
the trader has income from any business other than securities trading and has GST Registration, it is
advisable to report the trading turnover from securities trading under Non-GST Supply in the GST Return.

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