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TMI BlogApplicability of Section 24 of the CGST Act 2017 on Mutual Fund AgentsX X X X Extracts X X X X X X X X Extracts X X X X ..... Applicability of Section 24 of the CGST Act 2017 on Mutual Fund Agents X X X X Extracts X X X X X X X X Extracts X X X X ..... less than 20 lakhs from 2017-18 to 2020-21. but the officer is charging him under section 24(vii) and applying section 76 on him (Tax collected but not paid to Government since the AMC has declared that whatever commsion we pay to agent is all inclusive of GST. But my client have been receiving 1% commission before GST and after GST also. Nor he has raised any invoice or collected any GST from AMC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . I think there is any circular or notification REGARDING NON-APPLICABILITY OF section 24 on mutual fund agents. please advise Reply By Shilpi Jain: The Reply: In this case the agent is not making supply on behalf of anyone else. Hence, registration should not attract. Reply By Shilpi Jain: The Reply: Sec 24(vii) states as below persons who make taxable supply of goods or services or both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ON BEHALF OF OTHER TAXABLE PERSONS whether as an agent or otherwise. So registration requirement attracts only when supply is made on behalf of someone else Reply By KASTURI SETHI: The Reply: It is a interpretational dispute only... (i) A mutual fund agent is NOT covered under Section 24 (vii) of CGST Act for the purpose of compulsory registration as the said agent is eligible for threshold ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption, if his receipts of commission are less than Rs.20 lakhs per annum. ((ii) Units in mutual funds is security and securities are neither goods nor services as per definition of 'services'; as per Section 2(102). Thus securities being neither goods nor services are non-GST supply. (iii) As per Explanation to Section 2(102) of CGST Act, the activity of facilitating or arranging trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions in securities is taxable and not mutual funds (securities) itself. (Emphasis is on the activity of facilitating securities i.e. non-GST supply. (iv) As per Section 2(5) of CGST Act. . an agent means who works for and on behalf of another person and sub-section (vii) of Section 24) is applicable to those persons who make taxable supply on behalf of taxable persons. (v) A mutual fund agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is arranging or facilitating transactions in securities (non-GST supply). Thus the elements of 'taxable supply' and ''taxable persons' both are absent in the activity of mutual fund agent. mentioned in sub-section (vii) are not present in the activity of mutual fund agent. The agent is arranging or facilitating transactions in non-GST supply. (vi) The activity of a mutual fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d agent is taxable but the elements of 'taxable supply' and ';taxable person' as specified in (vii) are absent. (vii) So the compulsory registration is not required. Reply By Abhinav Jandial: The Reply: Thank you so much Kasturi Sir for your detailed reply. Actually I have already explained this interpretational issue to the AO at the enquiry stage. Neither him nor his AC is acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epting this. They are only emphasizing on the word agent referred to on the section 24. As a result they have issued a SCN. The AO is asking for any departmental clarification or circular. Please advise Reply By Shilpi Jain: The Reply: Pls have a look at Circular No. 57/31/2018-GST Reply By KASTURI SETHI: The Reply: There are three circulars. First two are relevant for you. You know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board's circulars are binding on the department as per judgement of Hon'ble Supreme Court. These circulars synchronize with GST Acts. These are NOT contrary to the letter and spirit of GST Acts & rules. C.B.I. & C. Circular No. 57/31/2018-GST, dated 4-9-2018 *Note. - Corrected vide C.B.I. & C. Corrigendum F. No. CBEC/20/16/04/2018-GST, dated 5-11-2018 Circular No. 73/47/2018-GST, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 5-11-2018 X X X X Extracts X X X X X X X X Extracts X X X X
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