gold chit is taxable under gst act
how? is there provision? chit monthly receipts treated advace basis
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Gold chit fund taxable under GST.
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| Yes, chit fund services (including gold chit funds) are taxable under GST. Here is the treatment: 1. GST Rate: Chit fund foreman's services are taxable at 12% GST (SAC 9971 — financial and related services). The foreman's commission/fee is the value of service, not the total chit amount. 2. Monthly Installments (Subscripttions from members): These are not 'advances for services' in the traditional sense — they are installments for the chit pool. GST applies only on the foreman's commission/fees, not on the total subscripttion amount collected from all members. 3. Time of Supply: Under Section 13 of CGST Act read with Section 31, GST liability on foreman's commission arises when the prize/lot is paid out (i.e., when the service is deemed completed for that month's auction/draw). 4. Gold Chit Specifically: If the prize is given in gold (instead of cash), the supply of gold itself may be a separate supply — taxable at 3% GST (HSN 7108). Proper documentation and GST invoice for gold component must be issued. 5. ITC: Members receiving the gold or cash prize cannot claim ITC as it is a personal receipt, not a business input. 6. Registration: If aggregate commission turnover exceeds Rs. 20 lakh, GST registration is mandatory for the chit fund company/foreman. |
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