Putting to rest all speculation, SEBI Chairman U K Sinha categorically ruled out the possibility of any assistance from the market regulator on service tax issue. Sinha clarified that the market regulator will not discuss service tax issue with the Ministry of Finance. He said this on the sidelines of an ‘Investment Outlook 2015’ event held in Mumbai.
“SEBI will not intervene in the service the tax issue. We are not going to discuss tax related issues with the government,” Sinha told Cafemutual.
Last week, the AMFI board had decided to take up the service tax issue with SEBI and the Ministry of Finance. “We have decided to make a representation to SEBI and the Ministry of Finance. A working group committee appointed by AMFI is working on it,” H N Sinor, CEO, AMFI had earlier told Cafemutual.
Earlier in March, some top mutual fund officials are said to have met SEBI to discuss this issue.
Ever since Budget 2015 proposed to withdraw the service tax exemption given to mutual fund distributors and brought it under reverse charge mechanism, there has been resistance from distributors.
A notification dated February 28, posted on Central Board of Excise and Customs (CBSE) site states “Accordingly, service tax in respect of mutual fund agent and mutual fund distributor services shall be paid by the asset management company or, as the case may be, by the mutual fund receiving such services.”
This has come into effect from April 01, 2015.
