The Securities Transaction Tax (STT) on buying and selling of stocks will be levied on the average price of the stock instead of the trade price. It is expected to be operational in the first week of October. A decision to this effect was taken at a high-level meeting of the ministry of finance officials in New Delhi last week. There are still certain issues to be sorted out regarding STT, as to who will collect the tax and how the set-off will be allowed on that. Both the National Stock Exchange and the The Stock Exchange, Mumbai have voiced their inability to implement STT on the trade price of stocks owing to software hitches. Since 80 per cent of the trades account for day trading, levying STT on average price would not make much of a difference.
