about mutual fund agent service

[vikas sharma]

sir,

I am mutual fund agent. hdfc ,reliance like some companies asked me to take registration in sevice tax and deposit service tax on commisson paid by these companies and realese bills for it but they will not give any service tax extra they said it is your duty to pay it irom your commisson recieve from us. which we have to pay you. is it true.

kindly suggest me r in which service i will take registration.

[KASTURI SETHI]

Sh.Vikas Sharma Ji,

Vide Notification No.18/16-ST dated 1.3.16 (w.e.f. 1.4.16) Mutual Fund Agent's services have been omitted from RCM and from 1.4.16 liability for discharging ST has been shifted on Service Provider. Now 100% liability is yours. You will have to obtain ST registration provided your turnover of taxable service exceeds Rs.Ten lakhs during the preceding year i.e. 2015-16.

 

 

[Ganeshan Kalyani]

Sir it depends on your terms. If commission is inclusive of tax, you have to pay tax within the amount received. Otherwise you can tax extra. Thanks.

[KASTURI SETHI]

Sh.Vikas Sharma Ji,

You may either classify under erstwhile BAS or now Other Than Negative List.

[Ganeshan Kalyani]

Sir , please ensure what Sri Kasturi Sir has advised. Thanks.

AI Summary

Service tax liability shift: mutual fund agents must register and discharge tax as service providers after RCM removal.
Liability for tax on mutual fund agent services has been shifted from reverse charge to the service provider effective 1.4.2016; agents must obtain service tax registration if their taxable-service turnover in the preceding year exceeds the registration threshold and comply with payment, invoicing, and classification requirements, including treating commission as inclusive or exclusive of tax and classifying the service under Business Auxiliary Services or Other Than Negative List to determine taxability.