SEBI to pay Rs 75 crore service tax after revenue dept denies exemption request

Stricter tax rules for stock investments and the easing of fiscal deficit With the revenue department unwilling to allow retrospective exemption, the Securities and Exchange Board of India (SEBI) will pay Rs 750000000 as service tax. SEBI Chairman Ajay Tyagi had lobbied for an exemption from the service tax department and had written to the revenue department as well. However, the department wrote back in April saying that an exemption would only be applicable on a prospective basis. In the 2016-17 Union Budget, the government had exempted SEBI from paying service tax in future. SEBI provides services to stock exchanges, their members, brokers and investors for processing initial public offerings, mutual funds, new fund offers and informal guidance to companies. In 2014-15, the service tax department had issued a summons to SEBI. In March last year, SEBI wrote to the Finance Ministry seeking an exemption retrospectively. However, soon after the regulator's letter was sent, the service tax department issued a notice regarding dues of Rs 750000000. But Central Board of Excise and Customs was not convinced with SEBI's reply and the regulator received a notice for personal hearing in January.