We are always available and open to answer your questions and concerns. Talk to us, to have a better clarification
GST (Goods and Services Tax) is a single tax levied on the supply of goods and services in India. While the contributions or payouts in chit funds are not directly taxed under GST, there are parts of the service that are.
The key area where GST comes into play is the commission or service fees charged by the chit fund company. Managing a chit fund involves administrative tasks like organizing auctions, handling the collection of funds, and ensuring payouts are smooth. For these services, the chit fund company typically charges a commission. GST on chit fund commissions is applied at the rate of 18% on this commission or fee. So, if the company charges you for managing the fund, GST is added to that fee.
However, it’s important to note that the subscription amount you pay as a member—your regular contribution to the fund—is not subject to GST. Similarly, when you win the chit fund amount, that payout is also not taxed under GST. The tax applies only to the services the chit fund company provides, not the actual money flowing between members. This means chit fund GST rate is only relevant to the administrative services and not the actual contributions or winnings.
So, in simple terms, while chit funds themselves aren’t directly taxed, the service charges for running and managing the chit fund attract GST. If you’re part of a chit fund, you won’t see GST on your contributions or winnings—only on the company’s fees.Â
Tax on chit fund returns follows a similar principle, where only the commission fees are subject to GST, and not the returns you receive as a member.
Let’s say you’ve joined a chit scheme worth ₹1 Lakh. The GST is calculated based on the company commission, which at Kopuram Chits is 7% of the chit value.
7% of ₹1,00,000 = ₹7,000
₹7,000 × 18% = ₹1,260.
Digital chit funds also adhere to the same GST regulations.
We are always available and open to answer your questions and concerns. Talk to us, to have a better clarification
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4 Comments
While you have 7%, ksfe charges just 5%
For 100000 chitty, the commission is only 5000
Therefore the chit has just 5000*18/100=900 for GST
10-Months Chit
Chit Value: ₹3,00,000
Amount You Get (at end): ₹2,85,000
Total Paid (over 10 months): ₹2,67,150
✅ Net Profit: ₹17,850
20-Months Chit
Chit Value: ₹3,00,000
Amount You Get (at end): ₹2,91,000
Total Paid (over 20 months): ₹2,64,000
✅ Net Profit: ₹27,000
40-Months Chit
Chit Value: ₹3,00,000
Total Paid (over 40 months): ₹2,22,600
Amount You Get (over time): ₹2,91,000
✅ Net Profit: ₹68,400
Comparison Summary
Plan Duration
You Pay
You Get
Net Profit
10 Months
₹2,67,150
₹2,85,000
₹17,850
20 Months
₹2,64,000
₹2,91,000
₹27,000
40 Months
₹2,22,600
₹2,91,000
₹68,400
Gst 18% 0n commission 1260 for that why should bidder pay commission amt goin to chit fund they are the brnifisher already i am looser why should i pay once they are getting 7 percent commission why i should pay
300000 chit aution amount30000 howmuch amount i will get 2.70.000 are less