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Today Date : Friday, June 21, 2024

Plea to withdraw GST on Chit Funds

Plea to withdraw GST on Chit Funds

Chitfund firms have demanded withdrawal of GST levied on the commission earned by them for running chits.
Talking to newsmen, the President of Erode District Chitfunds Association SK Ramasamy said around 2,600 Chitfund companies are registered and functioning in the state. The firms have been approved by the Central and state governments.  There are 40 chitfund companies in Erode district alone and their turn over is up to Rs.60 crore per month in the district.

In this case, the Central government has announced to increase the GST from 12 to 18 percent on the 5 percent commission amount available to the company while collecting chit fund from the customers every month. The GST hike will be effective from July 18.
Due to this increase in GST, the customers who join chits are refusing to pay the tax amount to the companies.  Due to the GST, many  conduct chit business without registration.  Due to this, many registered companies are affected and incur huge losses.

In Tamil Nadu alone, the government receives income of Rs.2,000 crore through Chitfund companies by way of various taxes like professional tax and income tax.  Due to the GST, the business will suffer and the revenue will suffer.Interest charged by banks on loans is not subject to GST.  Chitfunds also provide similar services.  Apart from this, GST is not levied on the banks and corporates who run chit business, but only small chitfund companies like us are taxed on GST.

The Central government should take this into consideration and completely cancel the GST for chit fund companies.  The state government should put pressure on the Central government regarding our demand, he pleaded. The association secretary 
A Shanmugam and  treasurer Sruthi Murthi were present.