What are the recent amendments in GST, applicable to MF distributors?
Recent amendments in GST rules exempt those mutual fund distributors whose annual income is less than Rs.20 lakh from all sources from registration.
I am a registered distributor and my earnings are less than Rs 20 lakh. What shall I do now to cancel my registration?
Whether your GST registration is a fresh registration or a migrated registration from Service Tax regime, cancellation has to be put through online portal only. Having amended the GST rules, the department will come up with a cancellation feature on their portal. You may contact your jurisdictional nodal officer for more information on this. You may even submit in writing to the department notifying the same.
Will Reverse Charge Mechanism (RCM) continue for unregistered distributors?
While the latest GST amendments suspended RCM till March 31, 2018, AMCs / MF industry has to take an opinion and administer the same.
What is a Credit Note? Why is this required?
Credit Note covers all the deductions from the value of services such as claw back, recovery, etc. The taxable amount will be calculated after factoring in these values.
Our portal provides indicative Credit Notes as well, for your convenience.
How do I reconcile the payment received, GST and arrive at the GST payable by me?
As a distributor friendly initiative, Karvy is providing “Indicative Invoices” for all positive values and “Indicative Credit Note” for all the claw back /recovery.
You need to deduct the GST amount as shown in the Credit Note from the GST amount shown in the invoice to arrive at the GST payable.
Similarly, you need to deduct the Credit Note amount from the invoice amount to match it with the payment received by you.
From next month, we are working to provide all these values in a single page itself, which obviates reconciliation.
How can I get my invoice and Credit Note downloaded and submit?
All registered Distributors serving Karvy served MFs shall register and log-in to the portal www.karvymfs.com to avail a host of invoice management services, free of cost.
I have other businesses along with MF distribution. Can I have my own running serial numbers for the invoices?
Yes. We have made provision in our systems to capture your own running invoice serial numbers also.
I have some queries on the contents of the Invoice and Credit Note. Whom shall I contact at Karvy?
Karvy’s Invoice Management Services are integrated with a Grievance workflow also.
Simply post your query and the concerned GST helpdesk official will respond to you with-in a day, depending on the complexity of the query.
I don’t have a digital signature. Can I submit physical invoices? If so, where?
Yes. We accept physical invoices at all our Karvy branches on behalf of our clients.
Is GST applicable on Transaction charges?
Yes, as Transaction Charges were covered under the Service Tax regime also.
As a distributor, am I rendering services to the AMC Branch or AMC HO?
As per the empanelment, distributors are rendering services to AMC head office only. Accordingly, the applicable GST is arrived and applied.
I am a distributor having branches in a couple of States. How will my GST be calculated?
The empanelment is between the “Home State” of the distributor, as available in the CDMS data of AMFI and the “Home State” of the AMC. Applicable GST will be arrived at, accordingly.
You may post any additional doubts that are not covered in this article and the same will be responded by EoD, every day, for the next one week.
Disclaimer: This article is intended to clarify on the market practices in vogue as on today and from a plain reading of the applicable provisions. This does not tantamount to be a tax advice of any nature or a recommendation. Please take advice from a qualified tax advisor for your guidance.
