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  • MF News ‘It is prudent to cancel your GST registration if you earn less than Rs.20 lakh’

    ‘It is prudent to cancel your GST registration if you earn less than Rs.20 lakh’

    However, pay your pending GST before applying for GST cancellation.
    Nishant Patnaik Oct 15, 2018

    One of readers from Maharashtra wrote to us with this problem.

    I am a mutual fund distributor earning less than 20 lakhs but GST registered. So far, I have not raised any invoices not have availed any input tax credit.

    I would like to understand if I could cancel my GST registration. If yes, could you guide me as to what steps to follow to cancel the GST registration?

    Dear distributor,

    You can avail the benefits of reverse charge mechanism (RCM) if you earn less than Rs.20 lakh. Also, since you have neither raised any invoices nor availed any input tax credit so far, it is prudent for you to cancel your GST registration, say tax experts.

    You have to ensure that you do not have any GST payment pending before applying for cancelation. The GST portal may not accept your application form if you have any pending GST amount. 

    You can cancel your GST registration by visiting this link https://services.gst.gov.in/services/login. Once you have logged in with your credentials, you will have to click on ‘cancellation of provisional registration’ appearing on the extreme right hand side.

    You will have to mention the reason by simply stating that your turnover is less than Rs.20 lakh. Since  you have not issued any tax invoice so far, you are good to cancel your GST registration by submitting it.

    Note: We have written this article based on the inputs from tax experts and operational heads of a few fund houses and R&T agents. 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.

    Have a query or a doubt?
    Need a clarification or more information on an issue?
    Cafemutual welcomes all mutual fund and insurance related questions. So write in to us at newsdesk@cafemutual.com

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    4 Comments
    Geetha · 5 years ago `
    In case of the ARN holders, who have registered and obtained GST numbers, post the introduction of GST regime, ie., from July 2017, the AMCs have been paying and crediting the GROSS Brokerage payments, INCLUSIVE of the applicable IGST @18%..

    In effect, the AMC bear the cost of GST, pass it on to the GST Registered Distributors, to facilitate their onward payment to the Govt., with due filing of the GST Returns by the Registered Distributors.

    That means, the AMCs do NOT follow the RCM, Reverse Charge Mechanism, in such GST Registered Distributor cases, as they have been doing for unregistered MFDs .....

    Therefore, such MF distributors are personally and individually responsible to pay online and pass on such (received) GST amounts to the Govt, via the GST portal.

    While doing so, such GST registered MFDs can avail the benefit of the concept of the 'Input Credits' to their account, which can be deducted from the GST payable for that psrticular month.

    That means, in case they have incurred and paid any GST in any of Invoices paid by them, related only to their Business and Professional Expenses, and such Tax Invoices are obtained with the MFD's GST Number mentioned therein, by uploading the details of such invoices, the Input Credit can be availed, resulting in reduction of GST payable for that month.

    Thus, it is a Win-Win situation for the MFD, if he or she is a GST Registered Distributor..

    Even the Banks automatically pass on the Input Credits for the GST they collect on their Bank Charges from us..

    Regarding the Invoices to be raised by the MFDs, all the four RTAs, Cams, KarvyMfs, FT and Sundarambnppfs , make such proforma Invoices readily available for the convenience of the MFDs, which can be downloaded on a monthly basis, for compilation and payment on a monthly basis..

    I feel, when GST is implemented everywhere across the country's organised Goods & Services sector, it is all the more beneficial for all of us, MFDs too, to be part of it and avail the benefits of Input Credits , then and there...
    The earlier one understands this GST concept and starts compliance , the better for him/her, in the long run.
    h r guglani · 5 years ago `
    OUR TURN OUT IS LESS THAN RS 20 LAKH
    PRUDHVI RAMARAO · 5 years ago `
    Thanks for the article on Cancellation of GSTIN.

    I have successfully cancelled the GSTIN.

    jagruti · 5 years ago `
    I have ARN No. for mutual fund and also GST No. I am regularly raising GST invoice. My income is below Rs. 20 lakhs p.a. Que.1. Is there any changes that I have not to raise any invoice. Que.2. I want to cancel my GST No.
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