New Delhi: The government is considering abolishing Securities Transaction Tax (STT) on trade of equity of small and medium enterprises on SME exchanges, which are likely to become operational by November.
"We will see operationalisation of the SME Platform in three months on both NSE and BSE," a senior Finance Ministry official said.
In order to encourage small companies to seek advantage of listing, the official said, the Ministry is "actively" considering to do away with the STT in the SME segment.
The issue of removal of STT for the SME trade was also discussed at a meeting of the officials of the Finance Ministry with the representatives of stock exchanges and brokers earlier in the week.
On lowering of the STT in equities trade, other than SME segment, the official said there were some differences which were being sorted out.
The idea behind reducing the incidence of STT is to improve volumes on stock exchanges, the official said.
Lower STT in the equity segment would bring down the cost of trading in shares, he said, adding waiver of the STT for SME segment will provide incentive for the proposed SME Platform.
The government introduced the STT in the 2004 on transactions in different types of securities. The rate varies from 0.025 percent to 0.25 percent depending upon the type of security traded and transaction -- whether sale or
First Published: Thursday, September 08, 2011, 22:41