NEW DELHI. Apr 3: Indian authorities have brought the Bombay Stock Exchange (BSE), the country’s largest bourse, under the tax net by lifting an exemption reserved for "activities of public utility", the Economic Times said yesterday. reports AFP.

Federal authorities have asked the BSE to pay 92.3 million rupees (2.8 million dollars) as income tax for the 1991-92 and 1992-93 financial years, alleging that the bourse was being run as a private broker's club, it said.

"The decision of the income tax department is based on the argument that the pro motion of the capital market only benefitted the broker community and not the general public", the respected fi-, nancial daily said.

The order follows a severe indictment of the Bombay exchange by a multiparty parliamentary committee probing a 1.3 billlon;dollar stocks scandal-

The fraud, allegedly masterminded by Bombay broker

Harshad Mehta with the con-.nivance of unscrupulous bankers and brokers, turned several thousands Investors Into paupers overnight when the artificially-inflated shares crashed.

. The parliamentary report said the bourse, which accounts for about 70 per cent of national transactions, was "characterised by a lack of fl-nancial management, chaotic operations’ and abeeqce of proper marketing control".

The tax order alleged that BSE authorities had failed to introduce steps to curb fraud and illegally extended loans to brokers.

But BSE executive director N Kolatkar told the Economic Times that the order and allegations of mismanagement were unjustified.

Ko)atkar said the BSE would file an appeal against the tax order, which "was not only expected to affect the BSE's image but also have adverse implications" on India's 22 bourses and its economy.