Applicability of Section 24 of the CGST Act 2017 on Mutual Fund Agents

[Abhinav Jandial]

My client is a mutual funds agent and has been served SCN from department for Non-Payment of GST on commission received from AMC for the years 2017-18 to 2023-24. His turnover is less than 20 lakhs from 2017-18 to 2020-21. but the officer is charging him under section 24(vii) and applying section 76 on him (Tax collected but not paid to Government since the AMC has declared that whatever commsion we pay to agent is all inclusive of GST. But my client have been receiving 1% commission before GST and after GST also. Nor he has raised any invoice or collected any GST from AMC.

I think there is any circular or notification REGARDING NON-APPLICABILITY OF section 24 on mutual fund agents.

please advise

AI Summary

Compulsory registration under Section 24(vii) questioned where mutual fund agents facilitate non GST securities transactions and fall below threshold.
The dispute addresses whether Section 24(vii) compels registration of a mutual fund agent who receives commission but does not issue invoices or collect GST. The argument is that mutual fund units are securities (not goods or services) and the agent's role in facilitating transactions concerns non GST supplies; therefore the subsection's required elements - a taxable supply and a taxable person on whose behalf supply is made - are absent, and departmental circulars have been cited in support of this interpretation.