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We compliment you on this wonderful initiative to help financial advisors on their business issues. We are a Mumbai based IFA doing business only with Maharashtra based AMCs. We qualify for the composition scheme of GST announced by the Government. We have also informed the Registrars about our opting for the composition scheme. Our query is related to billing/ invoicing that needs to be sent to all AMCs every month. What should be the format for the invoice? Will the composition scheme be applicable for Services given in March, payment received in April, invoices prepared in April and GST payment to be made in May? How is the 6% GST to be calculated and shown in the invoice? Is it 6% on the amount of commission received? Or has this amount to be calculated as if the amount of commission received is inclusive of GST i.e. to be calculated as 100/1.06? Since the registrars and/ or AMCs prepare and mail invoices to us, should they not be sending the invoices with a 6% calculation? Request you to help us solve these queries so that we are compliant on the GST payment.

As per your query, the composition dealer needs to issue a Bill of Supply and not a tax invoice. There is no format prescribed for a Bill of Supply, however, the invoice rules make it mandatory for a bill of supply to have the following details:- 

(a) Name, address and GSTIN of the supplier; 

(b) A consecutive serial number, in one or multiple series, containing alphabets/numerals/special characters - hyphen or dash and slash symbolized as “-” and “/”respectively, and any combination thereof, unique for a financial year; 

(c) Date of its issue 

(d) Name, address and GSTIN or UIN, if registered, of the recipient; 

(e) HSN code of goods or accounting code for services; 

(f) Description of goods/services or both; 

(g) Value of supply of goods/services or both taking into account discount or abatement, if any; and 

(h) Signature or digital signature of the supplier or his authorized representative

In addition to the above, the dealer should mention “Composition taxable person, not eligible to collect tax on supplies” at the top of the Bill of Supply.

Apropos your query with regard to the composition scheme being applicable for services given in March, payment received in April, invoices prepared in April and GST payment to be made in May and whether all registrars and/or AMCs prepare and mail invoices to you, should they not be sending the invoices with a 6% calculation, as per our view in the GST notification the composition scheme is applicable for supplies of services made on or after 1st April. Thus, the services supplied in March 2019 are out of the composition scheme. 

With reference to the 6% GST which is to be calculated and shown in the invoice, here is what has been mentioned under the Composition Scheme; the service provider cannot charge the GST thus it cannot be shown in the invoice. Also, since GST cannot be recovered from the AMC it cannot be said that the amount of commission received is inclusive of GST. The service provider needs to calculate the GST on the amount of commission received and paid to the Government. If commission received is Rs.100 then the GST that needs to be paid is 6% on Rs.100.

Advise you to further confirm/clarify the same with your Tax consultant as well.

Disclaimer:

Risk Factors: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Please visit - www.QuantumMF.com to read Scheme Specific Risk Factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the scheme's objective will be achieved and the NAV of the scheme(s) may go up or down depending upon the factors and forces affecting securities markets. Investment in mutual fund units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the Sponsor / AMC/ Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited (AMC). The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.