AMCs to deduct GST from commission from July 1

What needs to be done here is that all Small IFA's earning less than Rs 20 lacs have to form thier own body and raise this issue with the Finance Minister . It may be recalled that when some small sub brokers were issued notices in 2009 in Kerala for non payment of Service Tax which was actually paid by the Main broker under reverse charge, they got together and with the help of the Kerala CM they met the then Finance Minister Mr Pranab Mukerjee who then changed the law in thier favor by making sub brokers exempt. The same thing needs to be done here as soon possible as it seems that this issue was actually overlooked by the GST Comittee

Does 20 lacs limit apply to fd etc comn agents not selling mutual fund products!

Dear All,

I am a distributor and also a tax advisory according to my interpretation. if a distributor is earning less than 20 lakhs is not required to register under GST. so in that case AMC will pay GST under reverse charge. Since GST paid by AMC will be availed as input credit hence it is not cost to AMC so ideally commission amount payable by AMC to a distributor who is earning less than 10 lakhs pre and post GST would ideally remain the same. And if AMC deduct the amount from distibutor it would amount to trigger anti profiteering rules of GST.

Present case
commission paid 9 lakhs in forward charge so liability is on distributor. At present under SSI exemption distributor is not liable to service tax

in GST
commision paid 9 lakhs tax paid by AMC is 1.62 lakhs which will be avaliable as input hence cost to AMC is 9 lakhs

if someone has different opinion please revert

I spoke to couple of RMs from different fund houses. There is not much clarity given to them about GST. One of them said that, there is no way an AMC can deduct GST before paying the brokerage. So the confusion continues

Hello,
I want to know if an IFA has crossed commission rs. 10 lac last year, then according to rule he will have to pay service tax on all commission for FY 2017-18, what will be tax rule for him under GST.

My mf income 200000 have I compulsory to take gst no and file the return

i stay in Guwahati (north east ) Assam. Till last year if my brokerage income was less than Rs. 10 lac, hence no service tax / invoice was applicable to me .Now if my brokerage commission crosses rs. 10 lac then only i have to register with GST or what? plz reply. secondly even after crossing my income if i dont register then what will happen?

AMC collects the TER from Client which is inclusive of Service Tax which can be over and above the maximum TER recommended by SEBI. Suppose a fund charges 2% TER so on a fund of Rs. 1 lac it charges the client with Rs. 2000 plus Rs. 300 towards Service Tax. (360 in case of GST)

Suppose the fund decides to pay 1.50% brokerage i.e. Rs. 150/- to distributor. (As per agreement brokerage is inclusive of taxes) So now someone earning lesser gets Full Rs. 150/- but someone above exemption value earns 15% lower as he has to cough up the 15% s.t./gst from own funds. Both ST and GST are actually payable by AMC not Distributors but AMC says brokerage is inclusive of all taxes.

Now suppose AMC decides to pay GST over and above Brokerage. Say @15% on Rs. 150/- ie Rs. 22.50. In this case a ST/GST regd broker should get Rs 172.50/-.

From where to pay this Rs. 22.50? Well AMC collected Rs. 30/- from Customer as ST/GST. If they pay regd Distributors Rs. 22.50 as Taxes (which they do indeed pay to Landlords of theit office as ST on office rent).. Under Input tax rules the liability of AMC reduces by Rs. 22.50 and hence it pays Govt directly Rs. 30 - 22.50 ie Rs. 7.50. So does the AMC lose a single paisa? Answer is NO.

But AMC won't pay any tax over and above brokerage payable irrespective pf whether you are registered or not registered.. IN case registered brokers raise invoice without collection of GST from AMC then AMC in fact earns extra Rs. 22.50/- as Input Credit.

Problem is not ST or GST. Problem is AMC rule of "inclusive of all tax" funda.


In fact as Distributors of Banks such as Kotak or Magma they do pay ST/GST if you are regd.

What's the harm in paying ST/GST to Distributors if AMC can take the imput credit? Rather, they will make us pay the tax and that amount is the additional hidden profit of the AMC. Already AMC pay no more than 50-60% of TER as Trail.. This additional 15-18% adds to their huge profit on other people's money brought by Distributors.. And well they outperform index by few percentages only thanks to boring indices designed by Stock exchanges.

First make AMC pay GST to GST regd brokers before AMC like Motilal issues advisory to get regd.. Getting Registered means reducing profits and increasing compliance. Ask your AmC if they are listening.

I WANT TO KNOW GST PROCESS ON BROKERS FULL EXPLAINED ME

Pls give meaning of Reverse charge mechanism

Reverse Charge – A draconian provision under GST? CA. Gaurav Agarwal.

1. Sections 9(3) and Section 9(4) of the CGST Act and 5(3) and Section 5(4) of the IGST Act, deal with reverse charge mechanism

2. As per Section 2(98) of the CGST Act, “reverse charge” means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or sub- section (4) of section 5 of the Integrated Goods and Services Tax Act;

3. Under the definition u/s.2(98) of the term ‘reverse charge’ it would be the liability of the recipient to pay tax on the supply of such notified service

4. As per Section 9(4) of the CGST Act, the central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

5. We have a similar provision under Section 5(4) of the IGST Act.

6. The syndrome that we have to face is that both the CGST and the IGST Acts do not define the term ‘unregistered supplier’. Therefore perforce one has to assume that this term would mean any supplier who is not registered under GST and would include suppliers who are not required to be registered owing to their aggregate turnover being less than Rs. 20 lakhs under Section 22 of the Act. What does this mean in the real world? We have to look at an ocean of such unregistered suppliers of goods or services or both who are bound to be treated as unregistered suppliers and then go through the legal provisions to be GST compliant.

7. Imagine this RCM will cover purchase of coffee or tea from local vendors, purchase of stationery, procurement of services from small scale service providers, etc. Your profit and loss account will show it all and if the expenses you debit in P&L account are not supported by tax invoices from the registered dealers, then on such supplies you are statutorily required to pay tax on RCM notwithstanding the fact that you are or are not entitled to ITC under Section 16 to Section 18 of CGST Act or SGST Act.

8. Since RCM under the GST regime also covers inter-state inward supplies of goods, the very concept of RCM would assume draconian and very serious proportions. Thus, when an employee of a Delhi based company submits his travel claim related to his official trip to Chandigarh and claims a reimbursement towards his breakfast from a roadside joint in Karnal, his Delhi based employer would be required to discharge tax liability under the IGST Act in respect of this inward supply (of idli and dosa), of the value of say, Rs. 200/-. Imaging such bills are 200 per month amounting to Rs. 500,000/- then reverse charge has to be paid by Delhi based employer as per applicable rates for all such invoices – notwithstanding the fact that ITC may not be available for such expenses. Imagine the enormous task for computing tax liabilities under such provisions.

Further on Import of goods too RCM is applicable. And if you do not charge RCM and deposit, you violate the law and your return becomes invalid under Section 39 – you have not paid full tax.

9. Every business has to ensure that its suppliers, of both goods and services, are paying the right amount of taxes on time. This is accomplished through the reverse charge mechanism.

10. Further the Central government has the power to notify categories of supplies against which service recipient has to discharge the tax liability. Hence, all the provisions of the Act will now be applicable to the recipient of such goods or services as if he is the supplier of such goods or services.

11. The serious implication of such a mechanism is that when a person becomes liable to pay tax on the reverse charge, certain provisions like threshold exemption, time of supply, availing of input credit changes. There is a threshold limit for turnover aggregating to Rs.20 Lakhs for registration for normal tax payers under section 22 of the CGST Act but under reverse charge, there is no such limit under Section 24 of the CGST Act. The person has to be registered under GST irrespective of the aggregate limit. Therefore, it will not be unwise to say that through this mechanism the gimmick of Rs. 20 lakhs threshold limit withers away and virtually the Government is forcing all and sundry to come for registration or face penalties under the GST Law. Even services supplied by an Electronic Commerce Operator will attract reverse charge.

12. My worry is that time of supply and point of sale under reverse charge will also be different and too technical to appreciate. Thus majority of the taxable persons will violate this provision.

13. The service recipient can avail Input Tax credit on the Tax amount that is paid under reverse charge on goods and services. The only condition is that the goods and services are used or will be used for business or furtherance of business. Unfortunately, ITC cannot be used to pay output tax, which means that payment mode is only through cash under reverse charge.

14. The supplier has to mention in his tax invoice that the tax is payable on reverse charge.

15. Image GTA services; Directors; individual advocates or firm of advocates, taxi drivers or rent a cab operators( through e commerce operations), insurance agents, sponsorship services; author or music composer, photographers, artists, importers – the services provided by such persons to the service recipients will invoke reverse charge. What a voluminous work really?

16. If you run a business, you need to hurry and ensure that all the entities who supply you goods and services are registered for GST. If they aren’t, you will have to pay the GST on their behalf. This will increase your paper-work and can cause cash-flow issues as well.

17. To pay tax on reverse charge basis, first master the classification of goods art when you procure goods or services from unregistered persons ( not defined in law),
decide whetehr you would be entitled to ITC as per law ( that is decide whether the procurement is in the course of or furtherance of business)
and then decide the tax rates based on which you pay RCM.

And further through Section 31(3) requires you to issue an invoice in respect of goods/services procured from unregistered vendor and issue of a payment voucher in such cases at the time of making payment to such unregistered supplier.

18.Now imagine the scope of such a draconian provision ; cooperative housing societies; higher educational institutions, consultants working full time in the corporate sector; infra sector projects; builders – all facing huge compliance work.

19.My Take is that small traders or service providers will lose money – the big registered tax payers will charge a hidden tax component from such unregistered persons and then pay the same tax to the Government ( not from their pocket) and claim back ITC.

20.Lastly remember RCM must be paid and paid in cash through Electronic Cash Register notwithstanding the fact you may or may not claim ITC and as per strict time or supply and point of sale rules.

Get ready for a huge litigation on this issue.

whether AMC gets input credit or not of service tax or GST cannot be a determining factor for reimbursing the service tax or GST to IFA's. If AMC's avail services from distributors they ought to pay the GST. The mobile company who raises bill does not ask you whether to charge serive tax or GST only if the customer gets the input credit. Strange way these AMC's behave. Some AMC do reimburse GST than why others do not. Let the CFO's of AMC's come on a common chord.

What ro do ro get gst registration and is it compulsory for ARN holder earning less than 20 lakhs in a year?

I am a small scale MF distribuor, a senior citizen too, with base in Chennai and all my clients also are all within Chennai in Tamil nadu, getting a meagre annual income below 2 lakhs. Since the AMCs, I am serving for ,have headquatrers in different states, outside chennai , am I to register seperately for each such state where the AMC's HQ is located??I thought that GST regn no(GSTN)is unique for each person and independent of any state and the GSTN is like PAN no or Adhar no which is unique for each person.please confirm. The latter meaning of GSTN makes sense to me and avoids multitude of work for an average simple distributoror service provider of small stature to handle work!!(2) Again,in respect of the need for filing triple returns(even nil returns)as some people opine,when the total brokerage falls below 20 lakhs,In the case of uincome tax too,where- if the income falls below the 2.5 lakh limit and no TDS was involved, IT return need not be filed! Filing nil returns has no meaning even for regd brokers!!Registrationfor GST is needed perhaps only to avoid the AMC's deducting GST at 18% which is rather highresults in taxing small distributors and service providers of low stature.The service provider can be asked to estimate his brokerage and people falling far below that limit can be spared even to register for GST. That is more sensible than what is being talked about now!!!
PLEASE COMMENT ON MY VIEWS EXPRESSED ABOUE AND CORRCET ME IF I AM WRONG IN MY INTERPRETATION!! P.kanaka durga

i am agent of post office, mutual fund, adrash credit, lic
My yearly totally Income is less than 10 Lacs, should I have to get registered with GST.
what is the rule about gst

THE COMMISSION IS ALREADY REDUCED SINCE MANY YEARS APART FROM THAT, GST OF 18% IS TOO HEAVY WE DONT HAVE ANY TANGIBLE PRODUCT TO SELL TO BE LEVIED WITH GST, ITS TOTAL INJUSTICE, IF AN IFA IS EARNING MORE THAN 10 LAKHS HE SHOULD HAVE TO PAY 30% TAX + 18%GST + EDUCATION CESS ALL PUT TOGETHER 50% ++++ ,50% TAX PAYABLE IN OUR COUNTRY IS INJUSTICE METED TO OUR GROUP,BY THIS I BELIEVE WE SHOULDNT FAVOUR ANY BUSINESS TO ANY AMC THEN THEY WILL CERTAINLY REALIZE AND CONTEMPLATE WITH SUPERIOR BOSSES TO REDUCE THE GST BELOW 6% OR LET AMC'S PAY THE GST.ITS TOATAL INJUSTICE WE SHOULD FIGHT FOR THIS.
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THE COMMISSION IS ALREADY REDUCED SINCE MANY YEARS APART FROM THAT, GST OF 18% IS TOO HEAVY WE DONT HAVE ANY TANGIBLE PRODUCT TO SELL TO BE LEVIED WITH GST, ITS TOTAL INJUSTICE, IF AN IFA IS EARNING MORE THAN 10 LAKHS HE SHOULD HAVE TO PAY 30% TAX + 18%GST + EDUCATION CESS ALL PUT TOGETHER 50% ++++ ,50% TAX PAYABLE IN OUR COUNTRY IS INJUSTICE METED TO OUR GROUP,BY THIS I BELIEVE WE SHOULDNT FAVOUR ANY BUSINESS TO ANY AMC THEN THEY WILL CERTAINLY REALIZE AND CONTEMPLATE WITH SUPERIOR BOSSES TO REDUCE THE GST BELOW 6% OR LET AMC'S PAY THE GST.ITS TOATAL INJUSTICE WE SHOULD FIGHT FOR THIS.
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I am from Andaman UT. I am running an air ticketing agency only. I am an agent of online travel companies like Travelboutique, Via etc and also I am direct agent of Goair , Indigo etc. I get commission from either airlines or travel companies mentioned, on each sales made. I want to know how and what type of GST is applicable to me and on which portion of the sale I have to pay GST and how much percentage? If I pay GST then how to raise invoice for the same ? I am very confused. kindly help .

Madam,
I am a manufacturer and exporter of spices. Sometime I sell my products with the help of mediator.

So help me how to pay them a commission.

Suppose I sell 1 crore value of products outside India or inside India and in that bill of 1 crore, I need to pay 25 lakh to mediator.
So how I need to pay. And is there any GST on 25 lakh as mediator is providing service to me?
And if yes than I have to pay him 25 lakh + GSt or 25 lakh including GST.

And what is the further process

Swet patel

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???? ???? ??? ??????? ?????? / ????? ?? ??? ?? ?? ?????? ????? ?? ??? ?? ?????? ?? , ???? ???? GST no.. ???? ???? ?? ???? ??? ???? ??? ??? ???? GST ????? ????? ??? ??? ?? ????? ?.

Sir,
Iam a IFA doing less than 10lakhs. In what form I have to pay tax to GST if raised invoice by any AMC IN FUTURE.

Once you take GST no.then you have to pay GST on every income.You have to pay GST on Brokerage earned from AMC as well as other income(if you have any) such as Rental income etc.But if you have only rental income of Rs. 12 lakh then you need not to take GST no.& need not to pay GST but if you are IFA so you have to take GST no. & you have to pay GST on other income also.(If brokerage income is 2 lakh & rental income is 10 lakh then you have to pay GST on 12 lakh).This is big disadvantage of AMFI asking to enroll to GST for each & every IFA.

in which GST form to file nil return &when.as a mutualfund agent.

I am an insurance agent in LIC. Is my commision/agent income will attract both GST and TDS ? If Yes, then what should I do now and how can I e-file in next AY?