For Quick Alerts
For Daily Alerts

Service Tax Liability On Mutual Funds, Not Their Agents


In a big relief to mutual fund agents, the government has said that distributors will not have to pay tax on services provided by them and the liability in this regard would entirely be on the fund houses.

In a public announcement, the Central Board of Excise and Custom (CBEC) said that mutual fund agents and distributors do not have the liability to pay service tax with effect from April 1, this year.

Service Tax Liability On Mutual Funds, Not Their Agents

"Liability to pay service tax on service provide by mutual fund agents and distributors is on mutual fund and Asset Management Companies (AMCs) and not on mutual fund agents and distributors," it added.

Earlier Finance Minister Arun Jaitley, in his budget announcement, had proposed to withdraw service tax exemption on services provided by mutual fund agents or distributors of AMCs.

Since then, mutual fund distributors have been demanding that they should not be burdened with this service tax as they were upset with the provision.

With the government raising the service tax rate to 14 per cent from 12 per cent earlier in this year budget, it would have become difficult for distributors as they work on commission basis.

At present, there are around 6,000 active mutual fund distributors and 44 AMCs, which together manage assets worth nearly Rs 12 lakh crore.

Mutual Fund is an investment vehicle with a pool of funds collected from investors to buy securities such as stocks, bonds, money market instruments and similar assets.


Read more about: service tax mutual funds
Story first published: Saturday, August 8, 2015, 10:04 [IST]
Company Search
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more