KARACHI - The federal government is likely to impose GST on services being provided by the stock exchange brokerage that has panicked the brokers on Monday, The Nation learnt on Monday. Despite the positive clarification by the Advisor to PM on Finance, the taxation issue has not yet been over at the local bourse as uncertainty is visible among stock brokers and investors. At preset, the government is collecting two types of taxes from the stock market - percent CVT on buying of shares and 0.1 percent of withholding tax on selling is being paid by the investors. Meanwhile, the KSE members held an informal meeting on Monday and discussed a number of issues. Sources revealed that the matter of taxation was the hot topic of the meeting. Moreover, replacement of CFS by another product was also under discussion. A KSE member, while talking to The Nation, said that the meeting was not official and KSE members met to discuss the problems of stock market unofficially. Several issues were under discussion including the matter of imposition of GST on brokerage services and the purpose of meeting was only to talk about the problems of the stock market, he said. The matter of taxation on capital market has affected the stock market sentiment negatively. Even Mondays market loss of 66 points was a result of rumors concerning the GST and other taxes. Meanwhile, the KSE has been ordered to establish a Singular Unified Trading Platform for the central execution of the trading orders of all the stock exchanges in the country within a period of six months. For this purpose, KSE has been further ordered to agree to reasonable commercial terms with both ISE and LSE within a period of two months for the eventual unification of the order books of the three exchanges. In a historic judgment that may end the current fragmented market system in the country, the Competition Commission of Pakistan (CCP) has directed the KSE to provide access to its order book to the orders originating from the brokers of the both Islamabad and Lahore stock exchanges so as to provide the opportunity of getting the best price executions for the investors of these smaller exchanges. The CCP has further observed that unified trading system has numerous benefits to the investors in terms of greater liquidity, better price discovery, security and greater transparency in terms of entire transaction being documented and traceable. In its judgment released after the completion of the hearings conducted on the complaint of ISE against the KSE for the abuse of its dominant position and refusing the deal, the CCP has further directed that in case the reasonable commercial terms are not agreed between the parties, then any or all parties can make a reference to the Commission which will then proceed to appoint a firm of chartered accountants to make such determination. The Commission has further directed that under all circumstances, it shall be the responsibility of the KSE to ensure compliance within the time period as stipulated in the order of the Commission. In case of KSEs failure to comply with the directions of the Commission, KSE shall be liable to pay a penalty of Rs.50.00 million at the end of the six months period and an additional penalty of Rs.250,000/- per day of the continuation of the non-compliance by the premier exchange of the country. It may be mentioned that the ISE had lodged a complaint before the CCP in November 2007 accusing KSE for violation of section 3 of the Competition Ordinance, 2007 for its abuse of dominant position by refusing to share its trading platform. The Commission while proceeding on the complaint of the ISE investigated the matter and concluded that there was sufficient weight and merit in the complaint of ISE and that the behavior of the KSE appeared to be in contravention of section 3 of the Competition Ordinance and further proceedings u/s 30 of the Ordinance were thought necessary. The Commission accordingly issued a show cause notice to the KSE on April 10, 2008 which was challenged before the High Court of Sindh and the KSE obtained a stay order on May 3, 2008 thereby restraining the CCP from taking any action on the show cause notice against KSE. The ISE challenged the stay order passed by the High Court of Sindh before the apex Supreme Court of Pakistan on May 03, 2008. The Supreme Court directed the Sindh High Court to dispose off the case expeditiously. The Sindh High Court accordingly decided the matter by directing the KSE to appear before the Commission and allowed the Commission to pass the final order but not to recover the penalty if imposed on the KSE. The main contention of the ISE and LSE was that the best price of the commonly listed securities was mostly available at KSE and therefore, the investors at other two exchanges were deprived of having opportunity to best price available at KSE.