MF News Distributors will have to opt for composition scheme before March 31, 2019 to avail benefits

Distributors will have to opt for composition scheme before March 31, 2019 to avail benefits

Remember that only Maharashtra distributors earning up to Rs.50 lakh and not doing any business with AMCs outside the state can avail benefits of composition scheme.

Nishant Patnaik Mar 29, 2019

If you earn up to Rs.50 lakh and do not have any business with AMCs outside the Maharashtra, you are eligible to avail benefits of lower rates under the composition scheme.

However, such a distributor will have to opt for the composition scheme on GST portal before March 31, 2019. Tax experts say that since March 31 is Sunday, distributors can opt for composition scheme until April 1, 2019.

Under the scheme, service providers earning up to Rs.50 lakh could pay GST rate of 6% instead of 18% with effect from April 1, 2019. However, these service providers cannot avail input credits if they opt for the composition scheme. Also, they will have to pay taxes quarterly but file returns annually.

Earlier in January, the ministry of finance clarified that taxpayers cannot avail benefits of composition scheme under GST norms if they provide services in other states. For instance, if a Chennai based distributor is selling the schemes of a Mumbai based fund house, he cannot avail the benefits of composition scheme. Since practically all distributors work with AMCs that are based out of Maharashtra and Tamil Nadu, they cannot avail the benefits.

That means only a fraction of Maharashtra distributors who do not have business with AMCs out of Maharashtra and earn between Rs.20 lakh and Rs.50 lakh can avail the benefits of composition scheme.

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12 Comments

S S AHMED · 5 years ago `

Yes I agree with my fellow arn holder
Amc are collecting or in other words adjusting gst in distributor commission
Then distributor pay gst reducing his/her commission .
This itc is claimed by amc . Its is fun very unfair practice..pitty on gvt. n its regulation.

Surendra Kumar Agarwal · 5 years ago `

Your view seems to be that if I do business in Mumbai for a MF registered outside Maharashtra, it will be treated as inter-state service. But view of government is contrary. In FAQ published in Mint dt. 30.08.2017, Q. 27 was same. Ans. Says that "if you are supplying services to the branch (of MF regd. in another State) office in the same State, it will be intra-state supply". Pl. Check the correct legal position and clarify.

Biswajit Nayak · 5 years ago `

In other industries like Home loan DSA payout the banks are bearing the GST burden. So the net amount paid to account is commission + GST. Where as in our industry commission - GST is net income.

H M shenoy · 5 years ago `

Any option to such distributor who have failed to opt for composition scheme before 31 March
To opt for composition Scheme now

Shikha Singh · 5 years ago `

This doesn't make sense. Most of the distributor will not get benefited.

ABHA GUPTA · 5 years ago `

this is totally unfair and in justice to other distributors .all distributors are working hard and revenue wise also they are not getting too much then why this burden of GST (18%) to us.

Mr. RAKESH YADAV · 5 years ago `

AMCs outside the Maharashtra means we do not business with Essel & sundaram ?

Ramakrishnakumar · 5 years ago `

insane move on part of the regulators

Rajan Gulati · 5 years ago `

The main thing is that it is totally unjustified as GST is being charged on the income (Double taxation). GST and Income tax

Abhishek dubey · 5 years ago `

Unfair to advisor companies have to issue gst invoice of same state.

Sunil Lalge · 5 years ago `

Totally wrong implementation of GST. Actually GST to be paid by the AMC"s to distributors, as AMC's are the service receivers , that collected GST to be paid to govt by the distributors. AMC's will take back the GST amount as input credit to off set GST collected by the AMC' by the investors ( GST on TER).

But AMFI is wrongly implemented GST law on distributors. No associations or regulator SEBI is correcting system.
is are asking

Sunil Lalge · 5 years ago `

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