Move will bring some relief to distributors who have seen their margins coming down after the entry load ban.
Distributors finally have something to cheer about. Industry officials tell Cafemutual that distributors and sub-agents will be exempt from service tax from July onwards.
That means any business transacted from 1st July will be exempt from service tax. The exemption applies to both upfront and trail commissions.
As of now, if a distributor got 1% commission by mobilising an application size of Rs 1 lakh, then she would get Rs 876 (Rs 1,000-Rs 123) after deducting service tax of 12.36%. Now, distributors can get Rs 1,000 on the same application.
The government has put 17 services under the negative list ambit which would be exempt from service tax.
The
move is likely to usher in some relief for distributors who have been operating
under reduced margins after the entry load ban.
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