New Delhi: Finance Ministry on Thursday told the mutual fund industry that their demands related with taxation issues could only be taken up in the next Union Budget.
"We took stock of basic concerns of the mutual fund industry. Taxation issue were discussed and we told them it can be taken only in next Budget in Finance Bill," a senior ministry official said after a meeting with fund managers.
However, he said the issue of entry load or commission paid to brokers did not figure in the meetings.
The mutual fund industry, which is passing through a bad phase, want consumers to bear the burden of 12 percent service tax on purchase of schemes.
The fund houses are also seeking permission to float pension schemes and provision of tax relief on such products at par with other life insurance policies.
Representatives of Association of Mutual Funds of India (AMFI and major players in the sector put forth their views before the ministry officials. This is second such meeting after Prime Minister Manmohan Singh's recent statement that mutual fund industry was in problems and something was needed to be done to resolve their issues.
Besides taxation, the official said the discussions also focused on "some changes' in the total expense ratio (TER) to incentives the sector and other sops to increase penetration of MF in tier-I and II towns.
The industry has demanded an increase in the TER, which is mainly administrative expenditure, to 2.25 percent from 2.2 percent, of which 2 percent is administrative expense and 0.20 percent exit load.
He said the fungibilty issues and additional incentive for investments in systematic investment plans (SIPs) of MFs were also discussed.
According to SEBI data, equity funds lost 4.86 lakh folios in the last two months i.e. April and May in 2012.
While there were 3.76 crore folios as on March 2012, which fell to 3.71 crore in May 2012, equity assets also fell 6 percent from Rs 1.82 lakh crore to Rs 1.70 lakh crore during this period.
First Published: Thursday, July 12, 2012, 21:59