Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: empanelment :: ACCOUNTING STANDARDS :: cpt :: articles on VAT and GST in India :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: VAT Audit :: ACCOUNTING STANDARD
 
 
Service Tax »
 IT infrastructure firm of GST under scrutiny for tax evasion
 GST council OKs draft law on relief to states
 GST Network gets notice for avoiding service tax
 GSTN contract may attract tax
 GST Council may discuss tax rate on gold at Udaipur meet
 Govt may rework indirect tax estimates mid-way after GST
 GST Council meeting: States allowed to tweak taxpayer division after consulting Centre
 Government may rework indirect tax maths mid-way after GST entry
 Govt may rework indirect tax mid-way after GST entry
 GST rollout will reduce disparity among states
 GST: E-tailers oppose tax laws

MF body seeks service tax exemption for commissions up to ₹10 lakh
December, 18th 2015

Come Budget 2016, the mutual fund industry will get full and final relief from its service tax headache. The Association of Mutual Funds of India (AMFI), the fund industry body, has negotiated with the Central Board of Excise and Customs to levy service tax only on those agents and distributors who earn a total commission of ?10 lakh and above. The announcement is expected to be made in the next Union Budget, CVR Rajendran, AMFI CEO, told BusinessLine.

Disgruntled distributors
The debate about who pays service tax has been raging in the industry since Budget 2015 withdrew the service tax exemption for MF distribution. Since the government did not want the investors to bear the cost, fund houses and distributors were passing the buck between themselves about who should pay this extra 14 per cent tax. By September, fund houses settled into the practice of collecting the tax from distributors and remitting it to the tax authorities on their behalf. Distributors were disgruntled because regardless of the size of their commission, they all had to bear the extra 14 per cent cut in income.

With the expected amendment to the tax rule, only about 4,600 distributors (of the roughly 70,000) with commission income above ?10 lakh will be affected.

“Our stand from the asset management company’s point of view,” Rajendran said, “is that if at all there is a tax that was not there at the time of signing the contract (between the fund house and the distributor) and has come subsequently, that is to be borne by the distributors.

“Service tax is applicable only when the income is more than ?10 lakh. Today, because of the reverse tax mechanism, almost all of the distributors are being treated equally as the tax is paid by the AMC. Now we are saying that this tax should be payable not at the AMC level, but only at the distributor level.”

The AMFI made a representation with the government stating that this reverse tax mechanism is is driving away most of the industry’s distributors.

“We don’t have 22 lakh distributors the way the insurance industry has,” Rajendran added. “Neither do we pay 35 per cent upfront commission to distributors the way they do. Getting and retaining a distributor is a challenge for the mutual fund industry. What we are saying is exempt these people below the ?10-lakh slab from paying this tax.”

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Wholesale Silver Jewelry

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions