Definition - Sub broker - Case law

[HIMANSHU JARIWALA]

Whether the person who is holding the remissiorship of the stock broker be treated as sub broker? For example, Mr.X is holding remissiorship of India Infoline. He is issuing contract note cum bill of India Infoline to his client, for which he is issuing bill of commission & brokerage to India Infoline. Whether this exemption notification is applicable to him? Whether he is treated as sub broker of India Infoline. whether any case law on this matter?

[Surender Gupta]

Can u elaborate your query about the scope of service. Is it limited to delivery delivery of contract note cum bill from the client to the customers of the client. Whether he is required to deal with the sale and purchase of shares on behalf of main broker. Merely having any contract with the stock broker may not make a person to be treated as a sub-broker. The scope of sub-broker for the purpose of service tax is limited one.

AI Summary

Sub-broker classification: mere remissiorship and billing to a broker do not automatically confer sub-broker status for service tax. Whether a person holding a remissiorship who issues contract notes and bills commission to a stock broker qualifies as a sub-broker for service tax purposes. The response states the scope of sub-broker is limited and mere contractual arrangements, delivery of contract notes, or billing do not automatically confer sub-broker status; active dealing in sale and purchase on behalf of the main broker is required. No case law was cited.