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Dear Sirs, For me, you and lot of other distributors, ever since the last budget, when MF distribution was brought under the Service Tax net, it was clear that AMC's had to bear the Service Tax. It is only that AMC wanted to interpret and understand it the way they wanted. Now everything is clear but they are still adamant to accept the plain truth. AMC's have been preaching and teaching all the distributors about not to be bogged down so much about loss of / reduction in revenue service tax and rather focus on increasing business by tapping in to huge unexploited market. (I feel sorry that our beloved association KAMFA also had the same view). Now when they have to face the heat, they are finding it difficult to follow there own words; easy to preach, difficult to practice. Let's keep that aside and think of repercussions / possibilities of this in future - well, my thoughts. For sure, AMC's will find innovative (legal, diplomatic or otherwise) ways to mitigate or avoid their losses (in fact, there is an offset / adjustment provision in the bill itself, which they should focus on try make best use of it) The first implication is that if new service tax rules are followed (paid by AMC's), the 'Regular' plans will become costlier than the 'Direct Plans' Difference in the Expense Ratios of Regular and Direct Plans will become larger; logically should be higher to the extent of Service Tax burden, but I assume, if AMC's / AMFI decide, they can make the difference look really awkward. AMC's may start pushing the 'Direct Plans' more aggressively to keep their margins higher (They don't have to pay any service tax on distribution on direct plans) AMC's will become more aggressive in sales through their sister concerns, so that revenue lost at one end is balanced by other end in the same group. They may also pitch direct plans against meager "Investment Advisory Fees". AMC's may restructure (reduce) the brokerage structure so that they have nil effect (the way it happens in Insurance Industry). So, questions we should ask ourselves: How should we look and receive and react if one or more or all of the above should happen? How can we be prepared for it? Can the equation (between AMC and Distributors) be more Win-Win* * Win-win: No AMC was willing to talk about median way when they were at safer end. Now they will be more than happy to look at those options but may not have face to ask the distributors. But relationships (commercial or otherwise) will be strong and long standing when it is win-win or mutual. Who has given the powers to AMCs to take the law in their hands to deduct Service Tax from Distributors unlawful. We have so many IFA Associations. Everybody is simply sleeping as they are the slaves of AMCs since they sponsor their Annual Events Well said by our friend Mr Girish Kodashettar, Bangalore Please share your thoughts.