I have one more doubt. But I will solve it myself. Applicability of GST on penalty since you are acting as a pure agent. I know there are few exemptions when the services are provided as a pure agent. But will have to check specifically for a stock broker as to how that works.
Editing to answer my own query:
If you are a pure agent, you shouldn’t be charging GST as per the Rule 33 of theCGST Rules 2017
But I see a problem here. The exchange is charging GST on the said penalty, and you are merely passing it on the client.
So whether exchange can impose penalty? This is a litigated subject and courts are giving contrary views in different cases. So its better I rest my case.
With the new rules, Zerodha should notify the user before the margin utilization goes beyond the threshold. Right now Zerodha is sending the SMS/email after margin utilization has gone over the limit. And that is too late because the trader would have incurred the penalty by then.
When Nudge was first released, I was expecting that this would be its primary feature… Hope it gets added soon so that crores of retailers’ money can be saved.
One more solution I could think of. Zerodha should separately keep extra margin when we take the position itself. So margin utlised may go negative in our account as per zerodha but it will actually still be positive as per exchange.
Example: Lets say 1lakh margin is required to take a position. Let Zerodha block additional 10 percent as safety margin. So 1,10,000 would be required. Now when available cash goes negative there would be Nudge for balance going negative. But short penalty wont be imposed since as per exchange it is still positive. I have given an example of 10 percent, but may be 5 percent would also give us enough time to change our positions.
Few may have other views, so this is up to client to decide. But in future if we are seeing more complaints on peak penalty as you said we may ask 5 to 10% more based on clients feedback.
I feel its in the best interest of the client.
I have seen other features in zerodha which are not really required as per regulatory. I Have seen so many complaining about not allowing CNC for stock options. But if one sees the bigger picture, its in the best interest of the client.
We have to anyways keep 5 percent at least in our account for intra day volatility. If by default if its blocked, it would be really beneficial.
Another alternative I would think of is have a feature where client decides how much additional margin he would want o be blocked in terms of percentage. This is similar to how credit cards limits which can be set in mobile applications or how we can set different limit to different beneficiaries when we add beneficiaries in net banking. We ourselves will be able to set it.
Again, technically I do not understand how difficult would it be to implement.
A lot of nudges/features which you have implemented seem more of a hindrance than being useful. Just let things be, if traders/investors can’t make wise decisions, that’s on them, can’t hold hand on everything…
We don’t, just in case if many clients requested in future, anyhow will check if we can give option to users to choose, don’t think this is possible but will try.
I found a solution to my own problem.
What I will do is I will place a buy order of niftybees 10 percent lower at 9.15 depending on how much amount I want to block for the day.
So if my 10 percent is 10Lakhs, I will place a buy order to the value of 10Lakhs. Zerodha will deduct this from my balance right away even if its not executed. The moment, my cash goes negative because of intraday volatility, I will get a msg from Zerodha that I have exceeded the available cash. But as per exchange since the buy order isn’t executed, I will not be charged penalty.
Will this work @siva ?
Can anyone let me know how to find the CPIN? It is not available in the invoice downloaded from Console. @siva : Have been waiting for this from 5 days.
I read Venu’s reply couple of days back. So, I am just asking what Venu said his team shared with Jason. “Basis of shortfall on which penalty is applied” and “we have produced an image of your car overspeeding”.
CPIN is generated when GST is paid. I do not think its of much use to you.
If its a B2B invoice then you can check it in your portal. But since this is in the nature of B2C, there is no way you can track the payment made by them to the tax authorities.
All that you have to do in this case is believe the invoice is genuine.
Lots of people, who aren’t regular traders and trade on and off during free time, aren’t fully aware of all the new regulations. It’s not about being unwise, it’s about them being uninformed.
I like that Nudge warns users that selling certain stocks before T+2 can incur penalty if you don’t have sufficient additional margins. I’ve been trading and investing for nearly 15 years on and off, and wasn’t aware of this ad-hoc margin regulation until Nudge warned me. Something similar on Nudge for margin utilization will help, especially for newbie traders.
Specifically in this case, why can’t traders utilize a little less funds to account for intraday & post-market margin changes? I myself take overnight positions everyday and keep around 4L for any margin increase (4L because I haven’t seen any increase beyond that in my case, might be different for others depending on their trades), but if Zerodha asks to keep something like 10% extra, then I would easily be losing out more keeping this extra sum as idle. I’d rather take that 0.01 % chance of getting the penalty.
If newbies don’t know the exact rules, then why should the people who know that & follow it in a disciplined way be penalised? It’s like you make an effort to go to a meeting on time, but it gets delayed because one or two people can’t come on time…so basically, you’re the idiot for doing things the right way…
@Jason_Castelino - This is exactly the main point why I started this thread. Please check out the 1st post in the thread. According to me Zerodha already prescribe higher haircut vs the stipulated (by NSE) and still we are paying peak margin penalty for even negative balance of 1 INR. Zerodha never clarified me on this point. This Zerodha’s margin calculation is a big black box to me.
