MF News GST relief for some more time to distributors earning less than Rs.20 lakh likely

GST relief for some more time to distributors earning less than Rs.20 lakh likely

The GST council is likely to defer implementation of reverse charge mechanism (RCM) until September 30, 2018.

Nishant Patnaik Jun 28, 2018

In a move that could provide a big relief to mutual fund distributors, the GST council, headed by Finance Minister Arun Jaitley, is likely to defer the implementation of reverse charge mechanism (RCM) until September 30, 2018.

According to a PTI report, the council has decided to defer implementation of RCM, tax deduction at source (TDS) and tax collected at source (TCS) until September 30, 2018. The council will shortly issue notification in this context, he added.

The expected deferment will benefit distributors earning less than Rs.20 lakh who do not have GST registration. In case you are earning less than Rs.20 lakh, but have GST registration, you can cancel your GST registration.

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.

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25 Comments

Prasad · 5 years ago `

Since IFAs are raising the invoice on AMCs the input credit is available to AMCs. Normally GST is to be borne by the AMCs but now GST registered IFAs are losing 18% of commission which is an input credit to AMCs - IFAs funding or subsidising AMCs from their brokerage. This is not followed by stock brokers.

RISHABAH AGRWAL · 5 years ago

Agreed with you..

SATHISH KUMAR · 5 years ago

FIRST OF ALL ONE HAS TO NOTE THAT THE COMMISSION IS PAID OUT BY MF SCHEMES AND NOT BY AMCS. IF YOU CLOSELY ANALYSE WHEREVER THE AMC PAYS THEN A SEPARATE INVOICE IS REQUIRED FOR THE DISTRIBUTORS TO FURNISH ONE. SECONDLY THE SCHEMES DO NOT RAISE ANY INVOICES ON ANY BODY SO CLAIMING OF INPUT CREDIT IS NOT POSSIBLE BY THE SCHEME. THIRDLY IF THEY WERE TO CLAIM INPUT CREDITS, STASTICS PROVIDE THE INFORMATION THAT MANY DISTRIBUTORS ARE NOT SUBMITTING THEIR INVOICES TILL DATE AND THIS IS NOT INSISTED TOO. UNLESS THE INVOICES ARE SUBMITTED TO THE MFS AND UPLOADED IN THE GST PORTAL ONE WILL NOT BE ABLE TO CLAIM THE INPUT CREDITS.

Avinash Chavan · 5 years ago `

Rs.One lakh ,Mutual fund Dividend payout or reinvestment shall also tax free as profit up to one lakh in growth option is tax free.(LTCG tax).

Jigna R Parmar · 5 years ago `

Distributors earning less than Rs.20 lakh also have to pay GST at 18% while filing GSTR3B every month. This is loss on part of distributors as all know with changes to TER, the brokerage has gone down, and after that GST comes. AMFI should help atleast.

RISHABAH AGRWAL · 5 years ago

@Jigna R Parmar You dont need to pay gst , you can file nil return if you are under 20 lacks limit.

Jigna R Parmar · 5 years ago

Nil return has to be filed in GSTR3B right? But we have to upload the invoices in GSTR 1. Please confirm on this.

RISHABAH AGRWAL · 5 years ago

NO you don't need to upload invoice in Gstr1 as you should not raise invoice to amc due to 20 lacs limit. you file nil return only .Once clarification comes after September, 2018 on RCM you can take the course of action as needed.

Jigna R Parmar · 5 years ago

But the invoices are generated at RTA level, and then we have to sign them and then upload the same on RTA website. So that also we do not need to do? And as I am doing business of other Financial products, but the income is less than Rs.20 lakhs, for them also i do not need to raise invoice. Please guide..

Bhavin Modha · 5 years ago `

Hi,
Those with GST registration and earning less than 20 lakhs of annual brokerage can file NIL return instead of cancelling their registration. Once clarification comes after September, 2018 you can take the course of action as needed.

Karan · 5 years ago `

What aobut the National Distributors like NJ, Prudent,etc?? They are already giving less commission to partners who are not registered under GST, as they have to give GST on their entire income. Is there any clairty about this with anyone??

pinky Patel · 5 years ago

I have been waiting for someone to take up this issue when you are a sub broker under big distributor. They do deduct GST & TDS too. How do we deal with this when your income is under 20L & no GST NO???

rajesh kumar · 5 years ago `

please tell me my incime is less than 20 lakh i have gstno company sending me invoices where they paying brokerage and gst extra tell me i have to submitt gst now there fine also

RISHABAH AGRWAL · 5 years ago

Can file NIL RETURN if you did not issue any invoice.

Srinivasan · 5 years ago `

LIC, GIC agents donot pay GST. Mf advisors also are agents of. Mf. This draconian clause should be removed forthwith. If government is bent upon taxing, they should collect the tax from investors

guntur vijaykumar · 5 years ago `

Dear Sir's

As am one of the distributor i sell mutual funds,insurance since 1991 now recently taken channel partnership with 5 bank and NBFC'S on all LOANS now presently am doing only loans my first pay the bank is insisting me to get GST other wise your pay will not be released so which i have taken gst on feb 27 of 2018 i recvd 8.11 laks for which i have paid gst Rs.1,25,000+38,000 income tax which was deducted from my payout now kindly guide me as am not in this 20 laks slab even bank had forced to pay GST help me please.

brajesh Kumar Tripathi · 5 years ago `

sir,
I am GST registered distributor earning about 2 lakh commission from mutual funds.since it was decided
that the income less than 20 lakh is not taxable fo gst, started to file nil return.I am not paying any gst now. Let me know please what to do? Am i punishable for this act? if yes what punishment can be loaded? What is my course of action to be followed?

D T sawant · 5 years ago `

Dear Expert, i have taken GST number in last year when GST was started.
but there was no clarity that time so i have forget to file nil return also.
now recently, i am going to cancelled GST number then huge penalty was there.what should i do for the same.

subramaniangomathinayagam · 5 years ago `

Dear Expert, i have taken G.S.T Reg no, but still (01-9-2017 to 29-06-2018 i have not submit my nil return, in the G.S.T Portal. Tax office of authority send a notice to my address.They demand late fee will apply to me. clarify wanted although i have turnover less than 20 laks

Anurag Sriwastwa · 5 years ago `

Pls anyone give suggestions on above last two same issue.

k das · 5 years ago `

Hi all as per my knowledge and research done relating to GST if you have taken GST number, then you have to compulsorily pay 18% irrespective of your income is above or below 20 lakh.I know its very painful but that's Law ,go through FAQ'S of GST in CAMS and other AMC'S website thats mentioned thr. Nil return filling will not solve the purpose because Government assumes that if you have taken GST number means your income will cross 20 lakh in the financial year so have to pay and follow all GST related regulations. This is my personal experience which I faced and fought with AMC but was of no use,simple if we are not liable to pay GST then why AMC'S are sending invoices to our email also in KARVY and CAMS distributor login you can find your GST invoices that to month wise.Finally I paid GST amount with late payment fine too sad to pay but helpless for the mistake of taking GST NUMBER.

K.I.Korah · 5 years ago `

I got a notice yesterday for a penalty of 10000 per month because I registered in August as we were warned that we have to pay penalty if we are not registering GST. After that I heard if our income is below 20 lakhs it is not compulsory to do GSt return. But last month I applied for GST cancellation. That time onwards from GSt office they asked me to file nil return . But from last August onwards I have to pay each month penalty for not filing. Now I am totally depressed. Yesterday I went to GST office. They are asking me why I registered.who ask me to register? Guide me for a fast action so that I can give advice to my clients with peace of mind. If I have to pay like this then how I can survive ?

RAKESH CHATURVEDI · 5 years ago `

Tax should be simple, deduct tds from distributors like insurance & GST should be in RCM.

Sunil · 5 years ago `

In my opinion GST law is wrongly implimplemented in mf industry by AMFI, as that only association of AMC's. There is no represention from distributor body.
For GST registered distributors GST amount to be paid to distributor over and above the gross commission earned. That GST to be paid to Govt by distributors.
For non GST registered Distributors AMC should pay the GST to Govt under RCM, take back by availing input tax credit.
But who is questioning the AMFI. No distributor association clarifies this to AMFI with the help of GST council.

Sunil · 5 years ago `

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