GST Requirement for MF Agent

GST Requirement for MF Agent

Goods and Services Tax (GST) is an indirect tax imposed on the supply of goods and services in India. It is a Multi-Staged tax as it is imposed at every step in the production process, but is refunded to all parties in the various stages of production other than the final consumer. And it is also known as a destination-based tax, as it is a tax that is collected from point of consumption and not from the point of origin like previous taxes. The Goods and Services Tax (GST) is a value-added tax levied on goods and services sold for domestic consumption. Also, GST provides revenue for the government. The topic GST requirement for Mutual Fund Distributor will be discussed in the following article.

Types of taxes under GST?

The new GST regime comprises of the following taxes –

• Central Goods and Services Tax (CGST) – This tax is levied on intra-state (within the same state) supply of goods and services.
• State Goods and Services Tax (SGST)– This tax is also levied on intra-state (within the same state) supply of goods and services
• Union Territory Goods and Services Tax (UTGST) – This tax is levied on the supply of goods and services within the same Union Territory
• Integrated Goods and Services Tax (IGST) – This tax is levied on inter-state (among different states and union territories) supply of goods and services

Please note, all these taxes will be levied basis the location of the distributor as a supplier of services and the location of the Asset Management Company (AMC)/Mutual Fund (MF) as a receiver of services.

Mutual Fund Agent

Mutual Fund Agent is the agent who helps in buying of Mutual Funds India and earn a commission from bringing in investors in the Mutual Fund schemes. Also, the agent helps in making investors aware of various schemes of the Mutual Fund house. Every mutual fund is registered with SEBI (Securities Exchange Board of India) and therefore, investing in them makes it safe. MF agents help the investors in carrying out investment transactions and guide them periodically on the performance of their investment. You can also take the help of the various Mutual Funds Calculator available online.

He keeps a track of the functioning and the performance of the Mutual Fund industries. Moreover, MF agents conduct quantitative and qualitative analysis using the database, monitor regulatory information, and interview portfolio manager. As well as he has to keep a record of important developments in the fund industry, markets, and the economy.GST requirement for Mutual Fund Advisor as he helps in understanding the use and requirement for GST

He needs to deeply coordinate and collaborate with the fund research time to identify the best investment options and risks. Also, This helps to create a database with fund recommendations and conclusions. Moreover, if in trouble ‘Where to invest’, check out Mutual Funds Investment

GST requirement for MF agent:

Sec. 24. Compulsory registration in certain cases

In sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act:

persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;

Accordingly, any person acting as an intermediary requires compulsory registration under the above-referred provision. And once a person is registered under GST he is required to make all the compliances including collection and payment of GST.

GST requirement for Mutual Fund agent as he understands and knows the requirement and importance of GST and knows how it should be correctly used.

FAQs

Q1-Is GST requirement for MF agent on mutual fund investments required?

The Financial services including the investment sector also got influenced after the introduction of GST. As per the new GST law, The service tax on mutual funds has to be paid at the place where it is consumed. Though, much clarification about the GST rates on mutual funds is not available. While the consumer can expect a subsequent rise in the expense ratio under most of the schemes.

Q2- Does GST apply to security deposits?

If the security deposits will be refunded to the payer then there will be no GST levied on those deposits. Whereas it that deposit will be as a part of the consideration, then GST will be levied.

Q3-How is GST calculated

With the unified system of taxation, it is now possible for taxpayers to know the tax levied at different tax rates for various goods and services under the GST regimen. For the calculation of GST, the taxpayer should know the GST rate applicable to various categories. The different slabs for GST are 5%, 12%, 18% and 28%.Eg-If a goods or services is sold at Rs. 1,000 and the GST rate applicable is 18%, then the net price calculated will be = 1,000+ (1,000X(18/100)) = 1,000+180 = Rs. 1,180.

Q4-Can a person take registration under GST, even if his turnover does not exceed INR 20 lakhs?

Yes. A person can opt for registering voluntarily under GST (i.e. seek registration even if not required by law). However, every registered person would be required to pay GST and threshold of INR 20 lakhs will not be available to such registered person.

Q5-What are important things to be included in an invoice?

A GST invoice must contain the following –

• Type of invoice – it could be a tax invoice or export invoice
• GSTIN of the AMC/MF or GSTIN of ISD of AMC, as the case may be
• SAC –a correct SAC along with the service description
• The correct type of GST – CGST, SGST/UTGST or IGST
• Signature of the issuer
• The original copy should be marked as ORIGINAL FOR RECIPIENT, to be sent to AMC/MF
• The duplicate copy will be marked as DUPLICATE FOR SUPPLIER

Q6-Is it compulsory to issue a tax invoice?

As per the GST Law, every registered person who provides taxable services to another registered person is required to issue a tax invoice. Carrying out reporting at a transaction level for the recipient to avail the input tax credit. Presently,  no clarification is issued by the Government about the RTA statement being accepted as an invoice for services provided by the distributor. Hence, registered distributors need to issue the prescribed invoices.

All types of mutual fund services are provided by us just log into our website WealthBucket. It is a perfect service platform that can give you a complete guide to mutual funds and help you. Also, you can give us a call on +91 9999379929. Our expert team will help you to solve all the doubts connected with mutual funds.
Even you can mail us on contact@wealthbucket.in

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