No plans to cut Securities Transaction Tax: FinMin

The government on Wednesday said ithas no plans to lower the Securities Transaction Tax (STT ) levied on equitytrades, even as collections dipped by about 18 per cent drop during theApril-October period this fiscal.

"No, Sir," Minister of State for Finance S SPalanimanickam said in a reply to a query on whether the government proposes tolower STT in the country.

He, however, acknowledged that STT collections droppedduring the April-October, 2011-12, period.

Collections from STT declined by 17.9 per cent to Rs 2,958crore in the April-October period of the current fiscal from Rs 3,602 crore inthe corresponding year-ago period, the minister said in a written reply to theRajya Sabha.

The stock exchanges had asked the Finance Ministry toabolish STT, arguing that such a step would help boost investments in the stockmarket and promote an equity culture in the country.

The bourses also sought simpler compliance procedures andthe imposition of lower costs on brokers to facilitate greater retailparticipation in the market.

The government had introduced STT in 2004 on transactionsrelated to different types of securities. At present, the rate varies from0.025 per cent to 0.25 per cent, depending upon the type of security traded andtransaction - whether sale or purchase.