GST on Brokerage Services

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Share brokers provide services for purchase and sale of shares for their clients. These services are charged under GST. Rate of GST is 18% on brokerage. You can find the SAC for brokerage services.
Note :- For the safety of the investors, there are other nominal charges besides GST on brokerage. These are Security Transaction Tax (STT), SEBI charge, stamp duty etc. Here we will only consider GST on brokerage.

Ex. Bashirkhan purchased 100 shares of MV Rs. 40. Brokerage paid at the rate of 0.5% and rate of GST on brokerage is 18%. Find the total amount he paid for the share purchase.

Solution : Value of 100 shares = 40 × 100 = Rs. 4000.
Brokerage per share =`0.5/100xx40=Rs. 0.20`
∴ Cost of one share = MV + Brokerage
= 40 + 0.20 =Rs. 40.20.
∴ Cost of 100 shares = 40.20 × 100 = Rs. 4020
∴Brokerage on 100 share = 0.20 × 100 = Rs. 20
∴ GST =`18/100xx20`

=Rs. 3.60

Ans. : Bashirkhan paid Rs. 4020 + Rs. 3.60 = Rs. 4023.60 for 100 shares.

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