GST and Duty-Credit Scrips: the HSN 4907 Exemption, the Fee, and Net Realisation
Trading a duty-credit scrip and paying a fee for the service are two different things to GST, and they are taxed differently. Here is what is exempt, what is not, and what lands on your books after a trade.
The two things GST sees
When you sell a scrip on an exchange, GST looks at two separate transactions: the sale of the scrip itself, and the service fee charged for arranging the trade. They are not taxed the same way, and keeping them straight is what keeps your books clean.
The scrip sale is GST-exempt under HSN 4907
Duty-credit scrips are classified under HSN 4907, and their sale or transfer is exempt from GST under Notification 02/2017. So when you sell a RoDTEP or RoSCTL scrip, no GST is charged on the scrip value itself. This is what makes a scrip so clean to trade: the buyer pays for the scrip, you receive that value, and there is no GST layered on top of the instrument.
The ScripX fee carries 18% GST
The service of arranging and settling the trade is taxable. In early access the sell side is zero commission and zero processing, so there is no fee and therefore no GST on it. After early access, the standard fee is 0.40% of face value, charged only when a trade settles, and that fee carries 18% GST like any professional service. The GST applies to the fee alone, never to the scrip value. The full arithmetic sits on the pricing page.
What the net-realisation statement shows
Every trade ships a GST invoice and a net-realisation statement, and the statement is written for your accountant, not just for you. It sets out the scrip value received, the fee, the 18% GST on that fee, and your take-home, on one page. Because the scrip line and the fee line are separated, your finance team can post each correctly: the exempt sale on one head, the taxable service and its GST on another, with the input tax credit on the fee available in the usual way. No reverse-engineering from a single blended figure.
Why this matters for a broker or a CFO
Duty-credit scrips move real money, and mixing an exempt sale with a taxable service on the books is exactly the kind of thing that turns an audit long. Because ScripX itemises the two and ships a GST invoice plus an audit pack per trade, the treatment is legible from the record. If you run many client IECs from one desk, the same clean split repeats on every trade, so reconciliation stays a routine rather than a project.
What this is not
This is a plain-English explanation of how GST applies to scrip trades on ScripX, not tax advice for your specific books. Classification and notifications can be read alongside your own position, and your accountant remains the right person to sign off on posting. What ScripX guarantees is that the paperwork behind each trade, the GST invoice, the net-realisation statement, and the audit pack, is complete and consistent. Read how a scrip sale is priced and settled to see where the fee sits, and if you buy as well as sell, how a bought scrip is kept clean. The compliance page sets out what ships with every trade.
Frequently asked questions
Is GST charged when I sell a duty-credit scrip?
No. Duty-credit scrips are classified under HSN 4907 and their sale or transfer is exempt from GST under Notification 02/2017. No GST is charged on the scrip value itself. GST applies only to the exchange fee for arranging the trade.
Does the ScripX fee carry GST?
Yes. The service fee carries 18% GST, like any professional service. In early access the sell side is zero commission, so there is no fee and no GST on it. The standard fee after early access is 0.40% of face value plus 18% GST, charged only when a trade settles.
What paperwork do I get for my accounts?
Every trade ships a GST invoice and a net-realisation statement that separates the exempt scrip value from the taxable fee and its GST, plus an audit pack. Your finance team can post the exempt sale and the taxable service on the correct heads without reconstructing anything from a blended number.
