AMFI has written a letter to Najib Shah, Chairman, Central Board of Excise of Customs (CBEC) seeking a meeting to discuss service tax issue on Monday. HN Sinor, CEO, AMFI has confirmed this development.
A senior official of a fund house told Cafemutual that AMFI has requested CBEC to grant personal hearing to discuss and present their views on the service tax issue. Discussing one such issue with Cafemutual, he said, “The advertisement has said that service tax paid by mutual funds and asset management companies is available as credit to them for paying service tax on their output services. Clearly, CBEC’s advertisement has treated mutual funds and AMCs on par or as the same entity. While AMC receives and provides input service as well as output and hence can avail of Cenvat Credit for the service tax incurred by it, a mutual fund only receives input service and does not provide an output service. Also, book of accounts are maintained separately.”
Two weeks back on August 06, CBEC has clarified that distributors are not liable to pay service tax and fund houses have to bear service tax through a print advertisement. Fund officials are surprised with the move and pointed out that that instead of issuing a notification in the matter, CBEC have chosen to release an advertisement.
Ever since the Budget 2015, there is a debate in the industry as to is to bear the burden of this tax – distributor or AMC or investors.
