Investor Q&A: Impact of GST on investing via Mutual Funds and Goalwise


Recently one of our investors wrote to us wanting to know how GST will affect her investments via Mutual Funds.

Since this is applicable to everyone, I thought I will share it here -

Hi,

Just wanted to check how GST will impact Mutual Funds, especially w.r.t Goalwise.

If you have any material explaining this, kindly share

Thank you,

Our reply:

Hi [..],

Thank you for reaching out to us with your query :)

With GST being introduced, the service tax for Mutual Funds charges have increased from 15% to 18%.

This will make the Mutual Funds marginally more expensive (but almost insignificantly so). For e.g. if the Mutual Fund’s annual charges (expense ratio) were 2% + service charge of 15% = 2.3% then now they will be 2% + GST of 18% = 2.36% i.e. 0.06% more annually. So your returns will be lower by 0.06% annually in this case.

As you can see the impact is quite small.

You can read more about it here: http://economictimes.indiatimes.com/mf/analysis/how-gst-will-impact-your-mutual-fund-investments/articleshow/58802103.cms

Let us know if you have any further questions. Would be happy to answer them. :)

Have a question regarding your investments or the markets? Feel free to write to me at ankur@goalwise.com or leave a comment below. :)