Providing big relief to mutual fund distributors, the GST council, headed by Finance Minister Arun Jaitley, has deferred the implementation of reverse charge mechanism (RCM) until June 30, 2018.
In a press release, the government said, “The liability to pay tax on reverse charge basis has been deferred till June 30, 2018. In the meantime, a group of ministers will look into the modalities of its implementation to ensure that no inconvenience is caused to the trade and industry.”
The move will benefit mutual fund distributors, who do not have a GST registration number, and those who have surrendered their GST registration number. These distributors should, however, have earnings of less than Rs.20 lakh a year.
For distributors with GST registration, AMCs continue to follow forward charge mechanism, i.e., AMCs will pay the gross commission to them. These distributors can avail of the benefits of input credit.
In case you are earning less than Rs.20 lakh, but have GST registration, you can cancel your GST registration by clicking here. Once you have logged in with your credentials, you will have to click on ‘cancellation of provisional registration’ appearing on the extreme right. You will have to mention the reason by simply stating that your turnover is less than Rs.20 lakh. Now, if you have not issued any tax invoice so far, you are good to cancel your GST registration by submitting it. However, if you have issued tax invoices, you will have to fill a separate form, called GST-REG-16.
