In an effort to help distributors comply with GST norms under the GST Composition Scheme, Karvy Fintech has introduced a new facility through which distributors who opted for the scheme can raise relevant invoices.
MF distributors are required to raise a new invoice called ‘bill of supply’ from April 1, 2019 to avail of the benefit of lower GST rates under Composition Scheme.
Distributors are required to inform AMCs and R&T agents if they have opted for the scheme. You can notify your status to Karvy Fintech through an online OTP based facility. You can also click here to notify your status to Karvy Fintech. The system will ask you to key in ARN and PAN to generate the OTP.
Once you notify the R&T agent, Karvy Fintech will provide an indicative bill of supply which can be verified and submitted online. However, these invoices will be available from the next brokerage cycle i.e. next month with an option to generate invoices for the previous months.
Sharing the rationale for this initiative, Ravikumar Somasi, General Manager, Karvy Fintech said that many distributors who opted for Composition Scheme have approached Karvy Fintech to help them with bill of supply. Hence, the R&T agent has enabled them to generate the relevant invoice through an online system. The company has also helped distributors generate the regular GST invoice before this, he said.
He further said that this is an interim support to distributors opting for the GST Composition Scheme until an industry level service to notify AMCs/RTAs is in place.
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% with effect from April 1, 2019. 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.
Karvy Fintech’s new facility addresses a felt need among distributors. Currently, only a fraction of Maharashtra distributors who do not have business with AMCs beyond the state and earn between Rs.20 lakh and Rs.50 lakh can avail of the benefits of Composition Scheme.
