New Delhi: In a big relief to mutual fund agents, the Central Board of Excise and Custom (CBEC) 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 mutual fund and Asset Management Companies (AMCs). 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% from 12%, it would have become difficult for distributors as they work on commission basis.
