Tax conundrum: FPIs uneasy after 18% GST on regulatory services

Set to approach Sebi, finance ministry for clarification

The Centre’s recent move to impose Goods and Services Tax (GST) on services rendered by the markets regulator, Securities and Exchange Board of India (Sebi), has rattled foreign portfolio investors (FPIs). They fear the decision could result in GST on “export of services”, which is currently a zero-rated supply.

“Custodians of FPIs will be taking it up with the market regulator and the Ministry of Finance (MoF), and will seek clarity on the applicability of the levy,” said two people privy to the matter.

“GST levy of 18 per cent is steep. But more importantly, it is a matter of