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Odisha MFD association has requested the GST commissioner of Odisha in Bhubaneswar not to levy heavy penalties on Odisha’s MFDs who did not obtain GST registration after crossing the threshold limit of Rs.20 lakh due to a lack of awareness under the section 73 of the GST act.
The Section 73 is determination of tax not paid or short paid or erroneously refunded or input credit wrongly availed or utilized for any reason other than fraud or any wilful mis-statement or suppression of facts.
The request was made after many MFDs received summons from the GST commissioner on the payment of unpaid GST along with hefty penalties.
The association said that many MFDs did not obtain GST registration number post 2017 as they believed that they were receiving net commissions.
Some MFDs have had to pay heavy penalties to the extent of Rs.50 lakh as a price of their ignorance.
The GST commissioner assured the association that the commission will look into the matter and give relaxation under the section 73 on case-to-case basis.
MFDs receive gross commission which is inclusive of GST. However, the government has exempted MFDs earning less than Rs.20 lakh (Rs10 lakh in hilly states like north east) across all financial products (such as insurance, p2p lending) from paying GST.
Also, if an MFD exceeds this threshold, they need to immediately obtain a GST registration number and pay GST on incremental income in the first year and from Re.1 in the subsequent years.
