In a move that could provide a big relief to mutual fund distributors, the GST council, headed by Finance Minister Arun Jaitley, is likely to defer the implementation of reverse charge mechanism (RCM) until March, 2019, said tax experts.
Tax experts told Cafemutual that distributors earning less than Rs.20 lakh a year are likely to avail RCM benefits until the government issues a notification to withdraw these benefits. The experts further said that GST council has informally communicated to them that they will not make changes to RCM till March 2019.
The expected deferment will benefit distributors earning less than Rs.20 lakh who do not have GST registration. In case you are earning less than Rs.20 lakh, but have GST registration, you can cancel your GST registration by visiting this link https://services.gst.gov.in/services/login.
For distributors with GST registration, AMCs continue to follow forward charge mechanism, i.e., AMCs will pay the gross commission to them. These distributors can avail of the benefits of input credit.
Earlier in October 2017, the GST council has first introduced RCM to benefit small businesses until March 2018. Later, the Central Board of Indirect Tax and Custom (CBIC) has extended RCM benefits until June 2018 and then September 2018.
