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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Customs and Excise »
 Delhi Customs launches special drive to help exporters get quick tax refunds
  Customs Audit Regulations, 2018
 Customs Audit Regulations, 2018
 Central Board of Excise and Customs to be renamed CBIC by April
 Central Board Of Excise & Customs New Delhi GST Flyers
 Hike in customs duty on electronics likely to boost revenue collection
 Customs duty raised on electronic goods
 Ministry Of Finance (Central Board Of Direct Taxes) Notification
 Refund of IGST paid on export of goods under rule 96 of CGST Rules,2017
 Customs And Central Excise Drawback – Part II
 Customs Valuation (Determination of Value of Imported Goods) Rules 2007

AMCs burdened with service tax liability
August, 13th 2015

The Central Board of Excise & Customs’ advertisement in newspapers last Thursday provided relief to the mutual fund distribution sector from service tax liability but opened a can of worms for mutual fund houses.

The clarification from the department states, “Liability to pay service tax on service provided by mutual fund agents and distributors is on mutual funds and asset Management companies (AMCs) and not on agents and distributors.” However, the AMCs and mutual funds can claim credit against the service tax payment, it adds. This is where the problem starts for fund houses. According to industry executives, they will not be able to claim credit against the service tax payment for distribution of mutual fund products.

Niren Shethia of PriceWaterhouseCoopers (PWC) explained why the tax credit would not be available to AMCs.

“The advertisement says mutual funds can take credit of the service tax paid on distributor commission. In the first place, mutual fund entities are not eligible to avail any credit of distributors’ commission. Further for AMCs, admissibility of credit depends upon the facts of each case and contractual arrangements,” he said.

“The matter is being taken up with the Association of Mutual Funds in India (AMFI) on Thursday,” said a top executive of a fund house. After deliberations at the AMFI, fund houses will send representations to the Securities and Exchange Board of India and the ministry of finance.

There has been much debate about who needs to pay service tax, AMCs or distributors. Thus far, AMCs had been deducting 14 per cent tax from the brokerage payout to distributors and were depositing it directly in the exchequer.

Rajiv Bajaj, vice-president and managing director of Bajaj Capital, told Business Standard, “Earlier, there was lack of clarity for almost four months about whether fund houses would receive the credit. Now, it is clarified and we are hopeful that it will reduce the impact on distributors.” Pratik Jain, partner, KPMG, said, “It is the AMC which has to pay service tax to the government. However, the AMC can have a commercial understanding with the distributor and the commission payable to the intermediary can be appropriated and adjusted accordingly.”

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

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