Tax experts told Cafemutual that distributors earning less than Rs.20 lakh a year would continue to get GST relief until the government issues a notification to withdraw these benefits.
Simply put, there will be no need to wait for the deferment of reverse charge mechanism.
R&T officials also confirmed that they have been following forward charge mechanism for all distributors irrespective of their earnings i.e. AMCs are paying the gross commission to them. “Advisors who can prove that they earn less than Rs.20 lakh across all financial products can continue to avail benefits of GST exemption. They can get their business income audited by a professional,” said an R&T official.
Also, 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 of 6% under Composition Scheme. These distributors are required to raise a new invoice called ‘bill of supply’ to avail of the benefit of lower GST rates under Composition Scheme.
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.
All other distributors with GST registration can avail of the benefits of input credit.
