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Today Date : Monday, May 27, 2024

Increase of GST on Chit Fund service

Increase of GST on Chit Fund service

The All India Association of Chit Funds has raised objections to the increase in the GST on chit fund services from 12 per cent to 18. The GST council in its 47th meeting held at Chandigarh in June has recommended the increase.

Addressing the media at Chennai Press club on Tuesday, A Chitrarasu General Secretary of All India Association of Chit Funds, said the savings of the chit scheme members are pooled and given to a needy person every month. 

The person wanting to avail the chit amount fixes the rate of discount to be foregone by the person to get the money. But when the GST increases to 18 percent people with low income won't come forward, the numbers will decrease drastically," said Chitrarasu.

The chit fund customers like small business people, start-ups, self-employed people and the middle class people in general will be forced to borrow money from money lenders at interest rates ranging from 36 percent to 60 percent per annum. They will end up with more debt within a few months, he added.

" We want the Chit Fund  service to be totally exempted from the levy of taxes as it has been done in the case of other financial services, " said AR Umapathy, Treasurer of the association.