Final clarity, however, yet to emerge; could take a few more days
According to a gazette issued by the
government – ‘a mutual fund agent or distributor to mutual fund or asset
management company for distribution or marketing of mutual fund’ is exempted
from paying any service tax from July 1.
Given the time lag between the booking of business and the processing of commissions, there is confusion as to whether all commissions paid out from July 1 will be exempt from service tax. Here is what the officials of a few top fund houses have told us
- Commission on any business procured on or before June 30 – service tax will apply irrespective of when the actual payout happens
- Fresh business procured from July 1 won’t have to bear any service tax on brokerage
However, an official of a top AMC told Cafemutual that their AMC would take a final decision within a few days.
IFAs who were eagerly waiting for the regulation to be implemented will have to wait for a few more days for a final decision.
