One of our readers wrote to us with this query,
I am Mumbai based mutual fund distributor. Please guide me on how to opt for GST Composition Scheme.
Sandeep Chauhan, Money Care
Dear Sandeep,
Remember, only distributors who earn up to Rs.50 lakh and do not have any business with AMCs outside Maharashtra are eligible to pay lower GST rates under Composition Scheme. It allows service providers earning up to Rs.50 lakh to pay GST rate of 6% instead of 18%. However, these service providers cannot avail of input credits if they opt for Composition Scheme. Also, they will have to pay taxes quarterly but file returns annually.
If you fulfil these criteria and ready to let go of input credits, you can opt for GST Composition Scheme.
You can opt for the composition scheme on GST portal by using login ID, password and captcha code. Once you login successfully, you will be directed to a dashboard. Click on ‘service’ and select the category ‘amendment of registration core fields’ from the drop down menu before opting for composition scheme. You can check your information and modify if necessary. Make sure the information in the portal holds true as on the date of opting for composition scheme.
Now search for the section ‘nature of business being carried out’ and select ‘others (9971)’ and specify that you are a supplier of financial services. After filling and verifying all information, you can select ‘Application to opt for composition levy’ and give your declaration. You can sign it digitally or through electronic verification code (EVC).
Remember that you cannot select past date to avail benefits under this scheme. You can select either the date of declaration or future date.
Once you get confirmation, you will have to update your status on GST Composition Scheme by sending an email to amfigst@camsonline.com with details of the GST number. You will also have to attach scanned copies of the confirmation receipt that you have opted for GST Composition Scheme.
Since AMFI will update all AMCs and RTAs about your Composition Scheme status, there is no need to inform AMCs and R&T agents separately.
In addition, MF distributors are required to raise a new invoice called ‘bill of supply’ to avail of the benefit of lower GST rates under Composition Scheme.
Please note that Cafemutual has spoken to GST experts at consulting firms, compliance officials at AMCs and chartered accountants to confirm this report. We intend to clarify your doubts on GST. 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.
