Anmi said that Indian capital market is burdened with numerous transaction cost which includes various direct and indirect taxes, such as STT, GST, and stamp duty

The Association of National Exchanges of Members of India (Anmi), on behalf of its 900 stock brokers, has written to the GST Council on rationalizing goods and services tax (GST) rates for capital markets, and urged the government to consider it in the upcoming Union budget for financial year FY23.

"Anmi's submission brings in recommendations for enhanced GDP growth, Equity Investment which will need to be incentivized and encouraged," it said in a statement.

Anmi said that Indian capital market is burdened with numerous transaction cost which includes various direct and indirect taxes, such as Securities Transaction Tax (STT), GST, and stamp duty. Capital market was among the first industry to be included in the ambit of service tax regime and has continuously seen a rise in service tax and GST rates from a nominal 5% to 18%.

According to Anmi, a rationalizing effort of reducing the GST rates to 12% may stimulate the sentiments of various market participants just by an insignificant reduction in tax collection.

"A deeper and stronger market may attract investments from FPIs, FIIs, and NRIs by showcasing them a competitive market in terms of cost of transaction. Anmi recommends that the rate should be rationalized for the benefit of the broking industry at large and the revenue implication would mean enhanced volumes and participation by large no. of investors," it said.