Your Voice

GST wrong implementation by AMCs

Date : 27-08-2017
Name: Sunil Lalge ARN NO :87541
Firm Name : Wealth Creating Services City : Hubli

Good morning friends
I have sent following mail to AMFI for GST clarification.
Who are agree for that, please send mail / letter from your end also.

Respected sir,

SUB:  GST clarification

 

I am AMHI registered Mutual fund distributor having ARN 84264  Sunil L Lalge With GSTIN 29ADDPL1907H1ZN.

I am happy  to see AMFI  is implementing GST law very firmly. It has given GST FAQ on its site.

I am finding some doubts in its implementation.

Some of my understanding on GST  ( in short)

1.        Any person supplying Goods and services should register to GST law. Who are  doing business only intrastate can have option for not registration up to Rs 20 lakhs of turnover for goods / 20 lakhs income for services.  For businesses having inter-state transactions they must register to GST irrespective of their turnover / income.

2.       Any entity registered to GST, should collect GST on their transaction value from their client and paid to government by process of GST return filing.  If their transaction is  intra-state they should collect SGST and CGST to be paid government. In our case (Mutual fund distributor) GST rate is 18% they should collect SGST 9% and CGST 9% and to be paid to Govt). If transaction is inter-state then they should collect IGST 18% and paid to govt.

3.       If Distributor is not registered to GST then AMC should pay GST on behalf of Distributor to Govt under reverse charge mechanism (RCM). AMC is  not eligible to take ITC (Input tax credit), That is considered as their supply(sale). So Distributor is penalized as they are not in GSTN network.

4.        If distributor is also registered to GST then AMC should pay the GST to registered distributor on his brokerage amount. Distributor will in turn pay the GST collected to Govt by the process of GST return filing.  AMC is eligible to take  this paid GST as their ITC( Input tax credit) as that is tax paid on business expenses . So AMC  and Distributor   both are benefitted as they under  GSTN networks

As I have received the brokerage for the month of JULY services, No  AMC are paid GST on my brokerage.  I am expecting all AMC are to be paid GST on my brokerage amount.

Please clarify me why AMC are not paid GST on brokerage to me.  As all AMC offices at my city  are telling that this stand is taken at AMFI level.

I am expecting valuable reply from you.

SUNIL LAXMAN LALGE

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Comments Posted
Avinash K ARN NO :ARN-92113/AVINASH K Satara, 11 Sep 2017

I fully support the one who has started this topic on this forum. I would like to see this put into action rather than just commenting on this forum. Sorry if this sounds rude to anyone. Dear all, please tell us what plan should be executed so that IFAs in India get justice for this mindless GST policy. Currently all I can say is that Mr. Pravin Dhuri, a hard working IFA like all of us had started a petition so that we all get justice. I strongly urge you all to please sign this petition. This will take just 1 minute of your time. But this 1 minute of every IFA will do justice with all IFAs. The link to sign this petition is: https://www.change.org/p/amfi-ministry-of-finance-sebi-appeal-against-wrongful-unjustified-deduction-of-gst-from-mutual-fund-advisor-commission There is nothing as simple as signing this petiition. Its the most important duty for an IFA at this hour. Thank you.

Sandeep Jawale ARN NO :46583 Parli Vaijnath, 10 Sep 2017

As I registered my GST and updated it on CAMS on 10 Aug 2017 ,All AMCs have deducted 18% GST from my brokerage except Franklin who have added GST in my brokerage.Now my CA is confused how to pay GST which is already deducted by some AMCs and added by some AMCs.Reply from Reliance for cutting GST is that in GST invoice we are not giving the claw back amount request you to calculate the all gross amount and the amount will matched to Invoice amount. Still there is any mismatch in amount please get back to us.

SUNIL LALGE ARN NO :84264 HUBLI, 05 Sep 2017

Good morning friends Find below todays my mail sent to AMFI / SEBI / and also some AMCs staff. See this video for clarification https://youtu.be/vcV73TufX60 Respected sir, Refer my earlier mail on GST clarification. I had asked to you to why AMCs are not paid GST on and above our brokerage. So far I have not received any reply from you. Now I have enclosed some images and also given link for you tube video uploaded by GST consultant. Which says  how AMC should pay the GST to Govt. 1) Through GST registered distributor by paying GST to distributor. Then distributor paying to Govt. 2) Through reverse charge mechanism paying directly to the Govt. In any case AMC should not deduct GST from distributors for not registered GST distributor, and GST to be paid to GST registered distributor on and above brokerage amount.

SUNIL LALGE ARN NO :84264 HUBLI, 01 Sep 2017

For education of Distributor find video how AMC should pay the GST to Govt. 1) Through GST registered distributor by paying GST to distributor. 2) Through reverse charge mechanism paying directly to the Govt. In any AMC should not deduct GST from distributors. See this video. https://youtu.be/vcV73TufX60

sandip datta ARN NO :108087 agartala, 31 Aug 2017

RESPECTED SIR; SUB; GST CLEARIFICATION I VE SOME DOUBTS ABOUT GST IMPACT ON OUR MUTUAL FUND DISTRIBUTION . 1.HOW WE ILL SUBMIT OUR ER INVOICES AND WHEN. 2 WHETHER THERE IS ANY BRACKET OF IMPACT ON OUR BROKERAGE. .AS WE R FROM NORTH EAST REGION HOU MUCH ILL B OUR SLAB OF BROKERAGE AS IT IS SAID THAT 20 LAKHS ON GOODS TURNOVER AND INR 20 LAKHS COMMISSION ON SERVICES ILL NOT B UNDER GST IMACT .HOW IT ILL WORK. THANK YOU

DIPAK GANDHI ARN NO :ARN-13814 BARODA, 30 Aug 2017

I DID GST REGN AS THOUGHT THAT I CUD SAVE ON GST DUE TO LIMIT OF 20 LAC.aLL AMC DID MAIL ME TELLING THAT GST WUD BE DEDUCTED IF I DID NOT GET REGN. BUT NOW-AMC ASKS TO RAISE INVOICE AND PAY ISGST MEANS WITH OR WITHOUT GST REGN WE R SUPPOSED TO PAY GST ..THEN WHY WE WERE ASKED TO REGISTER THERE BY NOW UNDER PRESSURE OF FILING GST RETURN IN TIME AND COMPLETING ALL PRECEDURE WHICH NOT ONLY COSTS MUCH BUT CONSUME OUR PRECIOUS TIME..hAVE ANY ANSWER ANY AMC PL??I THINK THOSE WHO HAVE NOT REGISTER PL DONOT DO NOW AND WAIT FOR CLARIFICATION AND AVOID THIS GST PROCESS..LET AMC DEDUCT GST..ITS MAKE NO DIFFERENCE AS ULTIMATE NET RECEIPTS ARE SAME. BUT I STILL DOUBT AND BELIEVE THAT GST IS NOT APPLICABLE/CHARGABLE TO US AND WE SUD HAVE STRONG PROTEST TO THIS..PL RAISE YR VOICE.AT LEAST LET AMC DEDUCT GST AND SAVE US TIME AND PRESSURE OF COMPLIANCE FILING RETURN ETC..

s venugopal sarma ARN NO :arn-61248 hyderabad, 30 Aug 2017

Mutual fund distributors are doing the same job as Insurance agents. amc provide service to investor, we provide service to amc and client, when i bill to anty of them, they have to bear the burden of GST and not we. High end of Hypocricy by regulators, different rules for different people.

V Chandru ARN NO :10633 Chennai, 29 Aug 2017

I endose the above view

CHANDRASHEKHAR KULKARNI ARN NO :15259 nashik, 29 Aug 2017

i strongly object the GST to applicable to small IFA whose income is below 20 lakh. i strongly protest that GST is deducated by all AMCs when my annual brokerage is less than 20 lakh. All IFA should unite & fight with SEBI & AMFI. make them rule those are below 20 lakh GST should not be deducated.we are all intermediary, why we should pay GST. every service industry charging GST to client. why we are always soft target by SEBI & AMFI. think IFA community. unite & protest

S Hariharan ARN NO :ARN-93120 Chennai, 29 Aug 2017

The AMC designs the scheme -a financial product; the end-user is the investor. In other words the AMC is financial service provider and the consumer is the investor. The GST flow should start from AMC and end with the investor. The IFA or Distributors should not be involved at all in the process- they will pay income tax as per their income. The investing risk or benefit is borne by the investor while patronising a particular shceme of the AMC. So the GST is also to be borne by the investor. This is similar to insurance product where the GST is levied on the insured and not on the distributing channel.

Nedrick Wealth Corporation ARN NO :Nedrick Wealth Corpo PANIPAT, 29 Aug 2017

Dear Mr. Lalge and all other IFAs, I am agreed with your stand and request all the fraternity to become unite against this. AMCs should pay us the GST amount of 18% over and above brokerage amount. I have raised this issue with few of the AMCs and none of them is ready to give me anything in writing, although they have not paid the GST amount. We should send our representation letter to Mr. Hansmukh Adhia and the Finance Minister Mr. Jaitley as this is a sheer case of profiteering.

S.VENKATRAMAN ARN NO :ARN-103104 CUDDALORE, 29 Aug 2017

If all AMC register GST in respective states, this confusion will not arise. Small IFAs will be benefited since they come under threshold Level of Rs 20 Lacs, All FMCG and Pharma companies have taken GST in respective states and supply the goods to their Dealer. Dealers supply goods to retailer in their states even if they do not have GST number.

Santhosh Iyer N ARN NO :ARN-41952 Cochin, 29 Aug 2017

True we are not the end users still we need to Pay. This practice is not in any other industries, like life and general insurance. Why we are penalised every time. This clearly shows the ineffencey of AMFI & Fund house.

AMIT SHANKARLAL SHAH ARN NO :ARN-98947 Nagpur , 28 Aug 2017

Im also very confused what can i do for GST

Rajat Roy ARN NO :95895 DHULITAN, 28 Aug 2017

I cannot understand why I will pay GST. So, I will support you.

jatin desai ARN NO :1352 ankleshwar, 28 Aug 2017

gst is to be paid by amc

Jose Abraham ARN NO :0566 Kottayam, 28 Aug 2017

JOIN IN AND AGREE WITH THE GRIEVANCES VOICED BY INDIVIDUALS, ESPECIALLY SUPPORT THE VIEWS OF Mr. NARAYANAN P S (ARN 26382 MUMBAI). SIMPLE STRAIGHT THINKING MAKES IT CLEAR IFA IS NOT AVAILING ANY SERVICE. RATHER BOTH FUND HOUSE / AMC AND THE INVESTOR ARE AVAILING THE SERVICE WHATEVER. IF IT IS TO BE ANYTHING AKIN TO THE MUCH TOUTED GREAT SIMPLE TAX ,MAKE GST A SENSIBLE PROPOSITION - GOOD , SIMPLE AND TENABLE. HOPE BETTER SENSE WILL PREVAIL ON THE POWERS THAT BE.

RAMA SHANKAR ARN NO :ARN-109341 NOIDA, 28 Aug 2017

If thersold limit is Rs.20,00,000/- for individual of any business entity then why Apply GST on All Mutual Fund Distributor even if their earning is less than 20 lakh. I request to AMFI please clarify the above said confusion

SANTANU GUHA ARN NO :35468 BHADRAK, 28 Aug 2017

Can I go for the composite scheme of GST.As my commission is well below the threshold limit.

BAJRANGI CHAUBEY ARN NO :116108 KAIMUR. BIHAR, 28 Aug 2017

I am new to this as a result my earning is very low.Due to confusion on GST I have not yet taken GSTIN. Pls guide me whether I register myself or not and also due to GST I am thinking to discontinue this businesses because the earning is far less as compared to the dificulties faced by me in rural areas and small towns which I belong to.I am very confused.

Reshma Krunal Patel ARN NO :ARN-97204 Ahmedabad, 28 Aug 2017

Dear Sunil Sir, Thanks for raising this issue. I have been speaking to few reputed CAs in Ahmedabad and they shared the same fact that GST should be paid over and above Brokerage. As a distributors we need to stand up against this. Let us create a poll or something where we can share consensus with AMFI. or We can also take feedback from Reputed CA or Account Firm and let us share their feedback with mutual funds. Regards, Reshma Patel

HIMANSHU SEKHAR SAHU ARN NO :M.B INVESTMENT KENDRAPARA, 28 Aug 2017

Dear Sunilji, Your statement is totally right. AMC should pay GST amount with the brokerage to the distributors.

Sumdha sahasrabudhe ARN NO :ARN-108960 Pune, 28 Aug 2017

I am a small distributor having ARN No 108960 mobilizing mutual Fund business in Pune City.My annual Brokerage commission is around 2 lakhs Rupees.All AMCs have deducted 18 % GST from my brokerage paid in August 17.if the GST is not applicable to those whos annual income is less than 20 lakhs.as to why AMFI is taking decision to deduct 18% GST.from our brokerage.In keeping GST limit of 20 Lakhs the purpose of GOVT must be to avoid complications and offering simple procedure to common man or business men.This main purpose is now violated.I request AMFI organisation to reconsider the case and take a favorable decision in favor of small distributes like me.most of the small distributes have not registered for GST and waiting for clarification S.K.sahasrabudhe

Harsha Dholu ARN NO :103876 Thane, 28 Aug 2017

I am agree with you... small distributor like me whose commission/income/turnover is Rs.250000/-, So my commission reduced to rs.205000 (250000-45000 GST). How can we survive ???

NARAYANAN P.S ARN NO :26382 MUMBAI, 28 Aug 2017

REALLY CANNOT UNDERSTAND WHY ARE WE DISTRIBUTORS PAYING GST. ARE WE GETTING ANY SERVICE FROM THE CLIENT OR AMC? NO. THEN WHY WE HAVE TO BEAR THE GST. IN ALL OTHER CASES, PHONE BILLS, MOBILE BILLS, BANK CHARGES, ELECTRICITY CHARGES, HOTELS ETC THE PERSON RECEIVING THE SERVICES ARE CHARGED GST. HERE THE AMC AND THE CLIENTS RECEIVE THE SERVICES AND HENCE THEY SHOULD BEAR GST.GST CAN BE ADDED LIKE THE PREVIOUS ENTRY LOAD OR REDUCED FROM THE AMOUNT INVESTED AND UNITS SHOULD BE ALLOTTED FOR THE BALANCE AMOUNT. SINCE ALL OUR ASSOCIATIONS ARE NOT TAKING UP THIS MATTER UNITEDLY, WE ARE SUFFERING. EVEN ON MOBILISATION OF FIXED DEPOSITS ETC, THE BROKER RAISES A BILL AND GST IS REIMBURSED BY THE MAIN BROKER/COMPANY AS THE CASE MAY BE.

Bimal Bhattacharjee ARN NO :106936 Kolkata, 28 Aug 2017

I have made several queries to amfi , who are not clear. Camps will raise debit with the GST amount from the commission earned by the Distributor. But, as a Distributor we are liable for Income tax and the AMC are the ultimate beneficiary from the funds deposited by the investors. Then, why the Distributors are penalized ,who is working in a Single State and that too total commission turnover of business is below Rs. 20.00 lakhs ? It is a double taxation when Distributor is not running their own business , but they are working as business provider for AMCs. I strongly raise the voice of protest and request others to be united & raise a forum .

SHRINIWAS DANDEKAR ARN NO :ARN-100128 Pune, 28 Aug 2017

Reliance AMC has deducted GST inspite of providing and updating GST no . What about invoices to be submitted . Is it compulsory for all IFAs to provide invoices to AMCs ? Please guide .

Yatish Wadhivkar ARN NO :123482 Mumbai, 28 Aug 2017

agreed with your concerns.

Subashree Murali ARN NO :ARN-85054 Bangalore , 28 Aug 2017

My charted accountant says once you are registered with GST, you have to raise invoice, fund houses should credit GST amount to you and you can claim input GST on your mobile bills etc. But the AMCs totally deny this. In fact they say they are not claiming input tax on brokerage paid. Then why ask invoice that too Karvy wants only digital signed and uploaded invoices, adding more expenditure for distributors. Why should we raise invoice if we are not going to get any benefit. We have registered and AMCs have to pay us GST component.

Vivek Paratne ARN NO :68693 Pune, 28 Aug 2017

I have the same information like Sunil said in his letter. If the AMCs are paying GST to us - distributors, then only there is point in taking GST number for the distributors who are less than Rs 20 lac turnover. However, AMCs are not doing this and distributors need to pay 18% GST from their pocket plus the compliance cost also needs to be paid to CAs. This is very unprofessional. Further, if our understanding about GST is correct then the AMCs have to pay GST to us and then we will pay to government. If they are not doing so then our associations must raise the issue to government.

RISHABH KUMAR AGRWAL ARN NO :87041 Bareilly, 28 Aug 2017

Kindly please resolve the following queries regarding GST : 1) Sir, As I am registered distributor under GST, dealing from Uttar Pradesh. Having earning turnover is far-less then Rs. 20 Lakhs. Then am I liable to pay GST ? 2) As Brokerage commission received by me from AMC is my gross commission earned during the month/period, Its neither after post deduction of gst amount nor inclusive of gst amount in my paid brokerage. Then why I should raise GST invoice to AMC s on my brokerage earned. ? (AMC not paid the gst amount in commission). 3) If I issued gst Invoice to Amcs then definately AMCs will utilise ITC (input tax credit) on my money (As AMC didnt paid GST to us) , Then why should Company enjoy the benefits of ITC on my money ? I can directly paid my liability (if any ) to government ? Sir, Kindly please resolve my queries as early as possible for which I will be very thankful. I had also queried for the same issue but no one is giving appropriate response.

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