Uniform stamp duty regime

Stamp duty on securities transactions used to be a headache because it varied by state, and brokers had to work out the right rate for wherever their office happened to sit.

From 1 July 2020, the central government replaced that patchwork with one uniform system. Exchanges, not brokers, now collect the stamp duty and pass it on to the state where each buyer is registered — using the same rate everywhere in India.

Chapter 9, section 9.4.2, sets out the mechanism: exchanges levy stamp duty on brokers based on their clients' trades, collect it, and deposit it with the states where the respective buyers are registered — tracked through the Uniform Client Code the exchanges already hold. Brokers, in turn, collect the same amount from their own clients.

The rate for commodity derivatives under this regime is Rs 2 per Rs 1 lakh of transaction, which the workbook expresses as approximately 0.002 per cent. This is a different, commodity-specific figure from the rate NISM's mutual fund paper teaches for the same 1 July 2020 reform applied to mutual fund units — 0.005 per cent on issue of units and 0.015 per cent on transfers — because the uniform regime sets separate rates for different classes of instrument, even though the collect-by-exchange, remit-by-buyer-state mechanism is the same one across all of them.

A trader in Gujarat executes a commodity futures trade worth Rs 25,00,000 through a broker.

Stamp duty = Rs 25,00,000 x (Rs 2 / Rs 1,00,000) = Rs 50

The exchange collects this Rs 50 from the broker as part of its normal levy process, and remits it to Gujarat — the state where this particular buyer is registered under his Unique Client Code — regardless of which state the broker's own office is located in. The broker then recovers the same Rs 50 from the client through the contract note, exactly as it would have collected any other statutory levy.

Chapter 9 (Accounting and Taxation), section 9.4.2, "Stamp Duty," which sits between the CTT section and the SEBI Turnover Fees section. Expect a question on who collects stamp duty under the current system — exchanges, not brokers — and on the commodity derivatives rate of roughly Rs 2 per Rs 1 lakh.

• Exchanges collect and remit stamp duty under the current regime — brokers only recover it from clients, they do not remit it to the states themselves.
• The state that receives the stamp duty is the buyer's state, tracked through the Uniform Client Code — not the broker's home state, which was the old, pre-2020 basis.
• The commodity derivatives rate (about Rs 2 per Rs 1 lakh) is not the same figure NISM's mutual fund paper teaches for mutual fund units (0.005%/0.015%) — both come from the same 1 July 2020 reform, but the rates differ by instrument, and an exam answer must use the rate for the paper being tested.