Impact of GST on Mutual Fund Investments

“The impact will not be that big, but it surely will change something for the mutual fund investors. The higher expense ratio will lead to lower returns in mutual fund schemes.” says Neil Parikh, CEO, PPFAS Mutual Fund.

The government has kept the service tax at a standard of 18 % for the financial services industry. This means a 3% points hike in tax liability for distributors. “The distributors are going to face the heat of GST, but not all of them. The smaller distributors, earning less that Rs 20 lakhs per year, will be exempt from the taxes,” says Mukesh Gupta, Director, Wealthcare Securities.