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2019 (3) TMI 1120 - AUTHORITY FOR ADVANCE RULING, GUJARATFinancial Institution or not - input tax credit - Whether NDDB can be considered as financial institution for the purpose of availing credit to the extent of fifty percent of input tax credit, as prescribed in Section 17 of CGST Act, 2017? - Held that:- The objectives of NDDB include promoting dairy and other agriculture based industries and to fulfill its objectives NDDB undertakes the activities in the form of technical or administrative assistance and financial assistance. Further, NDDB Act, 1987 is found to have specifically authorized NDDB to undertake the activity of financing including lending and borrowing money for diverse purpose. According to Section 16 of the NDDB Act the applicant provides finance/lends money solely to dairy co-operatives in a similar manner as is done by a banking company or a financial institution in general parlance. Section 17(4) of the CGST Act, 2017 says that a banking company or a financial institution including a non-banking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances shall have the option to either comply with the provisions of section 17(2), or avail of, every month, an amount equal to 50% of the eligible input tax credit on inputs, capital goods and input services in that month - It would be seen that as per the activities performed by the applicant, NDDB can be considered as a financial institution as they seem to be satisfying the requirement as provided in Section 45-I(C) of the RBI Act. Besides, NDDB is also declared as a ‘public of financial institution’ under the company Act vide Notification No. SO 219 (E) dated 23.02.2004. Thus, NDDB can be considered as ‘financial institution’ for the purpose of availing credit to the extent of fifty percent of input tax credit, as prescribed in Section 17 of CGST Act.
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