TaxTMI 
TaxTMI 
GST liabilty on unregistered person
X X X X Extracts X X X X
X X X X Extracts X X X X
....ST liabilty on unregistered person<br> Query (Issue) Started By: - Priyesh Mamnani Dated:- 24-7-2024 Last Reply Date:- 1-3-2025 Goods and Services Tax - GST<br>Got 5 Replies<br>GST<br>My client is a mutual fund broker. Since the inception of GST, the mutual companies give brokerage inclusive of GST irrespective whether the broker is registered or unregistered under GST. In 2018-19, my client rece....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ived brokerage of Rs. 9,50,000 which also includes GST. As per GST law, GST registration was not required as turnover is less than 20 lakhs. Now GST department is asking my client to pay the GST received from mutual fund companies for 2018-19 even there was not registration requirement at that time. Whether we need to pay the GST or not Request the experts to provide your views on the above iss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ue Reply By VENU K: The Reply: As per GST law , under Sec 76, Government can proceed for recovery of Tax Collected but not paid to Government without any time limit. It is likely that in the brokerage statement as well as in the broker agreement the fact that brokerage was being paid along with applicable GST extra would have been recorded .Then it will be very difficult for th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e agent to deny the fact of having collected GST. Once this fact is established , there is no option for the agent but to pay the tax with interest and face other consequences. Whether it is right on the part of mutual funds to do such a thing to their agents is an altogether different issue. Any way this is very unfortunate. Based on my understanding of the law. Reply By Shilpi Jain: The....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Reply: Here examination of the agreement terms, invoices issued and other related docs is critical to comment on this aspect. If the broker has not charged GST in his invoice and the agreement simply mentions inclusive of all taxes, then there should be no further liabiliity of the broker. Reply By Padmanathan Kollengode: The Reply: I agree with views of Shilpi Ma'am. The invoice of broke....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r also plays a crucial role here. Reply By GAURAV SHARMA: The Reply: Circular No. 57/31/2018-GST Dated 4-9-2018 was issued by CBIC stating the category of agents who do not require compulsory registration under the CGST Act. Hence Mutual Fund broker not required for compulsory registration. I will request Shilpi mam to kindly share high court judgement, if any, on the stated subject. TIA ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Reply By Abhinav Jandial: The Reply: I have a query for Shilpi mam The department has issued an SCN to my client (who is a unregistered mutual fund distributor) under section 76. His overall receipts exceeded 20 lakhs from 2022-23 but in ignorance he did not obtain registration till 2024-25. he has not issued any invoice to any AMC nor any bill to any of the other companies. But since mer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e mentioning of "commission will be inclusive of all taxes" in the terms and conditions of the agreement with AMC, the department is charging him under Section 76. Whereas the client has already deposited the due tax under Section 73 and filed DRC-03. please advise how to convince the department to change their stand on this point.<br> Discussion Forum - Knowledge Sharing ....