Service Tax On Mutual Fund Agents, Service Tax

[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 ???

Posts / Replies

[KASTURI SETHI]

Sh.CA Puneet Gupta Ji,

REPLY TO QUERY NO. 1- Under Notification No.33/12-ST, value of taxable service for the preceding year (2015-16) is to be considered for availing threshold exemption limit of ₹ 10 lakhs in the current financial year (2016-17). Mutual Fund Agent Service was not taxable during the year 2015-16. Therefore, service provider of mutul fund agent service is entitled to threshold exemption limit of ₹ 10 lakh during the year 2016-17 irrespective of the fact whether turnover of mutul fund service was ₹ 10 lakh or more. The basis of admissibility is that this service was not taxable during the year 2015-16.

REPLY TO QUERY NO. 2 is - 'YES'

[Ganeshan Kalyani]

I agree with the views submitted by Sri Kasturi Sir. The exemption of threshold is made available to mutual fund agent / broker who are now liable to pay service tax under forward charge. Thanks.