MF Distributors Exempted From Service Tax from July 1

Mutual fund agents and their sub-agents are exempted from service tax from July 1 for distributing or marketing mutual funds. They will not have to pay service tax. The government decision to provide service tax exemption to these distributors will be a booster dose for the mutual fund industry and relief to the agents and distributors of mutual funds.

One of the officials of Finance Ministry clarified that wherever the main agent is exempted, their sub-agents would also be exempted. The service tax exemption for mutual fund distributors will also be shown in negative list regime from July 1.

According to the Co-Chairman of National Council on Indirect Taxes, Assocham, the benefit of service tax exemption for distributors, sub-agents of mutual funds would be available even in negative list of regime.