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In a communication, CAMS said that it has shared brokerage details of all MFDs with GST authorities irrespective of their GST registration status.
This has come after GST authorities of various states like Maharashtra, Karnataka and Tamil Nadu have sought information from CAMS on gross brokerage of MFDs starting from July 2017. The RTA has been asked to share brokerage details of all financial years after July 2017.
CAMS said, “CAMS had accordingly shared the information on brokerage paid to the MFD. As the required information was for all MFDs attached to a specific state without any reference to GST registration status, which anyway CAMS/AMC have no visibility beyond those who had provided registration details with AMFI, CAMS had shared the data for all MFDs irrespective of GST registration status. The data shared was as requested and was no way alluding to the various GST compliances as required to be done by the respective distributors.”
The RTA also clarified that the draft invoice facility offered by CAMS does not indicate actual GST liability of MFDs as neither CAMS nor AMCs have visibility of total income of MFDs.
It said, “To facilitate the distributors to discharge their obligations to raise invoices, RTAs made provisions to give indicative draft invoice details, including GST information, to distributors. The idea was that, distributors who would not have appropriate infrastructure for accounting, compliances etc., would have information readily available, for them to discharge their GST obligations, as may be applicable.”
CAMS also reiterated that brokerages to distributors are inclusive of all taxes.
GST came into existence in July 2017. In the initial phase, the industry followed the reverse charge mechanism under which RTAs deducted GST from gross commission and deposited it to the GST authorities.
However, in October 2017, the GST council kept mutual fund brokerage in forward charge mechanism i.e. the onus of paying GST was shifted to distributors. Also, the council exempted MFDs who earn less than Rs.20 lakh and do not have GST registration number from paying GST.
