Service Tax On Mutual Fund Agents

[CA. Puneet Gupta]

The Finance Bill, 2016 proposes to make services provided by mutual fund agents/distributor to a mutual fund or asset management company liable to service tax under forward charge, i.e. the service provider is being made liable to pay service tax ( mutual fund agents / distributors).

I have 2 queries relating to same : -

1. Whether a Mutual Fund Agent / Distributor can avail threshold exemption of ₹ 10 lacs in the year 2016-17 under Notification No. 33/2012- ST provided his value of taxable services in the year 2015-16 was exceeding ₹ 10 lacs ???

2. Whether sub - mutual fund agents who provides services to main mutual agents would also be required to get registered and covered under this levy ???

AI Summary

Mutual Fund Agents Eligible for 10 Lakh Exemption in 2016-17; Sub-Agents Must Register for Service Tax The Finance Bill, 2016 proposes that mutual fund agents and distributors will be liable to pay service tax under a forward charge. A query was raised about whether these agents can avail the threshold exemption of 10 lakh for 2016-17 if their taxable services exceeded 10 lakh in 2015-16. It was clarified that since mutual fund agent services were not taxable in 2015-16, they are eligible for the exemption in 2016-17. Additionally, sub-mutual fund agents providing services to main agents must register and are covered under this levy. The responses confirmed agreement with these points.