Service tax on mutual fund brokerage

Mahendra Naik (Business) (73 Points)

14 January 2017  
I am a mutual fund distributor having income from commissions paid by fund house. My income in the last year exceeded Rs.10 Lakhs and this year also it is more than 10 lakhs. Till last year the fund house was deducting service tax under reverse charge mechanism and paying out the brokerage after deduction. From this year service tax is payable by me as assessee. My query is that whether I am liable to pay service tax from Re.1 or on amount exceeding 10 lakhs? The query arises because last year I was under reverse charge and my liability was ZERO, the liability was on the fund house to deduct the service tax from my brokerage. Since I was having zero liability in the previous year even though my income from providing services exceeded Rs.10 Lakhs, my contention is that I should pay service tax on income more than 10 lakhs only and not from Re.1. Kindly clarify whether the stand that I have taken is correct and if possible please give additional arguments or justification to support my stand.