right way

Also, in insurance products, service tax is not being paid by the agents out of their commission as on date. It is paid by the policy holder. But in case of mutual funds, it is being paid by the distributors out of their commission. This is really very strange. AMCs should take the responsibility to pay it.

Yes, the legislation has intended that the service tax liability should be on the ultimate beneficiary of the service and not on the service provider. Hope the AMCs adhere to it and avoid unnecessary litigation.

I dont know why they(AMC,SEBI & Finance Ministry) are intend to ruin he MF distribution business,. Everytime we have to suffer with the irrelevant things. The only service in India(probably in he world) where service tax charged from he middleman not from the providor or the consumer of the services.

Now ball is AMC court.

AMCs should respond this as soon as possible and if there are delays from the Amc side , we should file and rti to ask the excise department about the practice adopted by the AMCs

Very nicely explained & clear message to AMC now the ball is in their court to decide Hope they revert back soon

only One letter by each distributor to "The Finance Minister of state finances , North Block New Delhi" Can solve the problem. Do write. Thanks

Very good point. It is made very complicated.

There must be proper clarification regarding servicetax. I believe that the servicetax must be born by the amcs , not the distributors.

In this regard, I filed a RTI asking the Department of Excise and Customs demanding an explanation as to who is liable to pay the service tax to which they were reluctant to spell it out and rejected my application with a plea that Interpretation of any Act does not come under the purview of RTI. This speaks of the deep rooting of this unjustified deduction. Now we have decided to file a case for refund of all ST deducted against an AMC.

The Service Tax deduction from IFAs brokerages is completely illegal. Please refer Notification under sub-section (2) of section 68 of Government of India, Ministry of Finance, (Department of Revenue) Notification No. 30/2012-Service Tax, New Delhi, dated 20th June, 2012 and subsequent Notification no.7/2015 dated 1st March, 2015 that clearly defines that the onus of Service Tax payment lies on the Receiver of Services, which are the AMCs and not the Distributors, who are the Service Providers. A recent Notification No.18/2016-Service Tax dated the 1st March, 2016 has amended the Notification no.7/2015 dated 1st March, 2015 by revising it as “in paragraph I, in clause (A),- (i) sub-clause (ib) shall be omitted;” which means that the Service Taxes from the MF industry is not chargeable anymore.

In the matter of Service Tax, which was imposed on us in the union budget of year 2015? But after that Tax Research Unit of Dept. of Revenue vide their amendment order No. DOF No. 335/5/2015 dated 28, Feb. 2015 Section 10(i), put liability to pay the service tax on AMCs not on agents. Then also AMC’s and other department kept mum and Agents are still paying the service tax since then. Service Tax charged from us was totally wrong and disobey of Govt. Order. SEBI must take action on it.

I think this is the right time to all IFA & distributer stand same and ask this question from AMCs to relevant this bill and AMCs must be clear as soon as possible. well done DFDA

The right & proper approach being put up to AMCs. Lets hope they respond to IFAs/all Distributors with full clarity and within two weeks of time. Regards,

All AMCs should immediately reply to this open letter. All eligible IFA should start raising bill to AMCs as suggested in this letter. I appreciate DFDAs efforts to explain this complicated and serious matter of service tax in such a simple way. Many thanks

I think it is better to sought clarification from service tax authority instead of further confusing the issue. As whatever way of accounting most of distributors are out of net as their commission less than threshold 10 lac limit. So this point is not a issue for them. And for NDs n high commission receiver, they must get clarification fro ICAI to prescribe standard accounting practice.

plz take all IFAs legal step against AMC & SEBI

A very relevant question being raised by DFDA for the benefit of the whole distribution community. AMCs should clear up the ambiguity and come clear on their service tax policy and their charge mechanism, the clarity should make the lives of distributors a little easy , as it is today there is a sword hanging over the head of each and every distributor , we dont need another ambiguity. All AMC heads should clarify on top priority

yes, what is the time lag to receive the clarification. It cannot go till infinity as we are liable to pay service tax.

Lime your knowledgeable comments.

The fact is, bigger distributors are being compensated for Service Tax with higher commissions. It is the smaller IFAs who are being forced to pay the service tax.The recent forward charge mechanism wont be useful for most of the IFAs as they have general insurance income as well. Whether it is forward charge or reverse charge the only fair way is to charge service tax to the investors who are end receivers of service . But, as long as there is no segregation between an advisor and a transaction only distributor at remuneration, SEBI will not allow service tax to be charged to scheme or investors.

Trust the AMCs have understood the crux of the matter . It is not the Intention of the government to double charge the service Tax. TAX is chargeable only once and any incremental income billing will entail charge of service tax on the additional income the the method of setting Cenvet Credit. The intentions have never been of any Govt. to double charge the tax .It does not promote a regime where tax is paid by one on income generated and if the income generated is part distributed then Tax is to be paid on the same again on the portion on which tax has already been paid by the first to the Govt. So the AMCs should take this matter on a war footing and clarify ASAP

All AMC CEOs should understand well and mend themselves. They must do for the sake of our business relationship.

It is indeed a concern which the AMCs should address and clarify on urgent basis. Actually, AMCs should have clarified this to the distributors on their own as this a taxation matter. In case of any unintended violation due to lack of clarity, it may severely harm a distributor.

AMCs should respond and address the points raised above at the earliest so that the already sandwiched distribution community gets some relief and some trust returns between the ifa fraternity and the AMCs