28-Oct-2026 08:37:37
JEFFERIES ON BROKERS, ASSET MANAGERS & EXCHANGES ; POSITIVE ON GST CLARIFICATION
• Government clarification reduces the GST burden on Foreign Portfolio Investors (FPIs) and other overseas investors. • Finance Ministry's October 26 circular clarified that brokerage services paid for by FPIs, NRIs and OCIs through repatriable INR accounts qualify as exports. • Such brokerage services will not attract GST, potentially reducing transaction costs for overseas investors. • Clarification comes amid discussions around additional tax relief for investors. • Lower transaction costs could encourage higher foreign investor participation and boost cash market turnover. • Jefferies believes increased cash market activity could benefit stockbrokers and depositories, with a relatively smaller earnings impact on exchanges.