Glossary
What is GST on Brokerage? Meaning, Example & Why It Matters
Goods and Services Tax applied to brokerage and certain other trading charges, but not to STT or stamp duty.
GST on brokerage is the Goods and Services Tax charged on the services involved in trading. It applies to your broker's brokerage, as well as to exchange transaction charges and the SEBI turnover fee. It is not charged on STT or stamp duty, since those are taxes themselves. At present GST on these services is 18%, though tax rates can be revised.
Why GST on Brokerage matters to you
GST effectively increases every service fee by a fixed proportion. If you pay a flat brokerage per order, the actual cost to you is that amount plus GST. When comparing brokers, make sure you are comparing like with like, because some advertise fees excluding GST while your bill includes it.
GST also applies to many other broker and DP fees, such as AMC, DP charges, call-and-trade fees and interest-related charges in some cases. These are easy to forget when estimating costs. Your contract note shows GST on trading charges, and your ledger shows GST on other fees.
Practical tip: when estimating trading cost, add GST to brokerage, exchange charges and SEBI fees before adding STT and stamp duty. If you are a business that can claim input tax credit, ask your broker for a GST invoice and speak to your accountant.
Example: Illustrative only: if brokerage and exchange charges on a trade total ₹100, GST at 18% adds ₹18, so you pay ₹118 for those services. STT and stamp duty are then added separately without GST.
See it in rupees: every charge and tax on a real trade, at every broker. Open the brokerage calculator
Related terms
- GlossaryBrokerage
The fee a stock broker charges you for executing a buy or sell order on your behalf.
- GlossaryExchange Transaction Charges
Fees charged by stock exchanges like NSE and BSE on the value of trades executed on their platform.
- GlossarySEBI Turnover Fee
A very small regulatory fee charged on trade turnover to fund the market regulator, SEBI.
- GlossaryContract Note
A legal document your broker sends after each trading day listing every trade, its price and all charges.
Frequently asked questions
Is GST charged on STT?
No. GST is not applied to STT or stamp duty, which are taxes themselves.
Is GST charged even on zero brokerage trades?
GST is still charged on exchange transaction charges and SEBI fees, so a small GST amount can appear even when brokerage is zero.
Can I claim GST input credit on brokerage?
Businesses registered under GST may be able to claim input tax credit in some cases. Speak to a tax professional for your situation.