GST registration for trading income

[SSB]

1. How does intraday option trading turnover calculated ? Can we only include absolute value of profit/loss during the year if we are settling the position same day?

2. If Profit/loss comes of option trading intraday comes under speculative income/loss, I presume this can not be offset against salary/house property/capital gain head and will come under business income head?

3. I have applied for GST under service category for education business, which has very few billing in full year.
   (a) Will the turnover of Option trading gets included in the GST turnover for the year under education business?
   (b) Since the turnover of education business is too less, can we surrender if we do not anticipate GST turnover crossing 20 Lakhs in future in a year? We assume option trading will not be included in the turnover.
   (c) If option trading income/loss intraday is considered under business head, can we claim brokerage charges and exchange charges to claim deduction?
   (d) Since I have not applied for GST for trading but for education, can we claim GST input on GST levied during option settlement intraday. What’s the process if yes?
   (e) If payment done to someone not related to education business, do we have to mandatory raise GST Invoices and add GST. Suppose I have to pay to someone for trading subscription?

[Surbhi_Pal]

Hey @SSB,

With regard to your queries,

@SSB

How does intraday option trading turnover calculated ? Can we only include absolute value of profit/loss during the year if we are settling the position same day?

Intraday turnover is calculated based on the absolute sum of the profits and losses per stock. Moreover, yes, intraday trading is categorised as speculative business and hence, losses from intraday trading can only be set-off against profits from intraday.

@SSB

Will the turnover of Option trading gets included in the GST turnover for the year under education business?

Trading in shares and securities is not considered supply of goods as per the GST Act and falls outside the purview of GST. Hence, the trading turnover will not be added to the other business’ turnover.

Moreover, yes you can surrender the GST.

@SSB

If option trading income/loss intraday is considered under business head, can we claim brokerage charges and exchange charges to claim deduction?

Yes, you can claim the transaction charges as expenses in the trading business (Intraday and F/O trading).

@SSB

Since I have not applied for GST for trading but for education, can we claim GST input on GST levied during option settlement intraday. What’s the process if yes?

No, you will not be able to claim the input credits. Moreover, GST invoice is raised by the seller. Thus, in your case, if you are paying someone for a trading subscription and if the seller is GST registered, he will issue a GST invoice.

[SSB]

Thank you very much. Just 2 clarifications needed:

c) If option trading income/loss intraday is considered under business head, can we claim brokerage charges and exchange charges to claim deduction? clarification- As you said this option trading intraday is speculative in nature, then how come the cost associated with it example, exchange turnover tax, brokerage, etc can be claimed under business expenses?

e) If payment done to someone not related to education business, do we have to mandatory raise GST Invoices and add GST. Suppose I have to pay to someone for trading subscription?
Further clarification: Assume I render service to someone not related to education (Education business I applied for GST ), Am I under obligation to raise invoice for each other category of my other business - freelancer, consultancy etc ?