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Also translated in Hindi and published in Dainik Bhaskar
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Deduction of Service tax from distributor's commision: It's not FAIR at all!
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Dear Distributors,
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Just Started
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- February 2008
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- 02.02.08
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From quite some time, all small and individual mutual fund advisors nee distributors (And insurance advisors too) are getting only a part of the commissions as 12.36% is being deducted upfront by the AMC as Service tax. In my opinion, this is unfair. I will explain why.
Service tax is exempted for small traders and service providers to the tune of Rs 8 Lakhs of service provided per annum. We are also service providers and for those whose commission income does not exceed 8 lakhs, service tax should not be deducted as they come into the basic exemption limit of 8 lakhs.
The question is how would a AMC know of the total value of services provided by the distributor as the same distributor is empanneled with lots of AMC. Well, in that case, Why can't the distributor claim a refund of the deducted service tax just like he claims TDS back while filing his income tax returns.
The distributor can get himself registered with Service tax department and submit annual returns and claim a refund. The AMC should issue a certificate at the end of the year showing the total service tax deducted along with the service tax number of the distributor.
Is that possible? Is this being followed? Anyone?
It would be great to have views of all distributors as well as Mr Datt.
Thanks
Rakesh Samar
BE, MBA, AFP
31-Pologround,
Udaipur. 313004
+91-93525-22368
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Hello Mr. Rakesh,
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Admin
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My apologies for the delay in replying - I was away for almost a month.
The concern you have raised is very genuine, and the suggestion you have offered is excellent - it is practically implementable, is in line with other current practice of claiming back TDS, and it serves the purpose!
I am not sure if this is being followed currently. But it is surely in the interest of small distributors.
Is it worth raising with AMFI? Comments are welcome...
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