Industry asks for minimal GST on Chit Funds

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The Incorporated Chit Funds Association (ICFA), Tamil Nadu, member of All India Association of Chit Funds (AIACF), New Delhi, on Friday made an appeal to the Central Government for unburdening the Chit Fund industry by levying minimal GST and amending the legislation for hassle-free procedures with respect to registration and functioning of the Chit Fund business.

“If the issue of the levy of tax is not addressed immediately it could not only adversely impact the working of the Chit industry but will also seriously curtail the financial inclusion cause. Also, enacting suitable laws that make setting up of Chit Fund companies and running them a less cumbersome task will make the industry grow” said T.S. Sivaramakrishnan, General Secretary, AIACF, New Delhi

“The capacity of this Industry to cater to the Lower and Middle Income Households is quite substantial and will be possible only with the legislative and Administrative support. In the scenario of country’s functioning of non-banking financial companies eased without such a tax burden, Chit fund sector also anticipates such a favor from the government,” he added.

He also noted that in the event of any fraud by unorganised finance companies it is always misquoted as Chit funds whose failure is a negligible 1 per cent in reality. This damages the reputation of the industry among public. It is demanded that the state government take required steps to curb such misrepresentations, he remarked.

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