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TMI Blog2019 (3) TMI 1120X X X X Extracts X X X X X X X X Extracts X X X X ..... ance. 1.1 The applicant submitted that the NDDB Act has specifically authorized NDDB to undertake the activity of financing, including lending and borrowing money, for diverse purposes. The applicant pointed out following relevant sections of the NDDB Act. "(d) designing, planning, promoting, developing, constructing, sponsoring and setting up of dairy industries and undertaking any other related promotional activity including financing of the same;" "(I) providing financial, technical, administrative, managerial or other assistance or taking Such measures as may be necessary- (A) for the development (if required by the import of quality semen) and preservation of High yielding cattle; (B) for adopting improved methods of cattle bree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm loans (b) short term loans (c) working capital assistance. 1.3 The applicant also stated that NDDB has been declared as Public Financial Institution vide Notification reference SO 219 (E) dated 23.2.2004, issued under Section 4A of the erstwhile Companies Act, 1956. 1.4 The applicant then referred to the Section 17 of CGST Act; extract of which is as under- "(4) 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 advance shall have the option to either comply with the provisions of sub-section (2), or avail of, every month, an amount equal to fifty percent of the eligible input tax credit on inputs, capital goods and inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial institution' given under the Companies Act, 2013, the Government vide Notification Reference SO 219 (E) dated 23.2.2004 has prescribed NDDB as Public Financial Institution. It is further stated that by virtue of that provision, the applicant is well considered as public financial institution which needs analysis to see whether the applicant is eligible to avail benefit of lump-sum input tax credit. 1.7 Considering above submissions, the applicant has set forth the following question to seek advance ruling of the Authority- (i) 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? 2. Central Goods an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure 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. The applicant submits that they provide various kinds of financial assistance such as (a) term loans (b) short term loans (c) working capital assistance; that the loans are given on similar terms and conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaning as assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act, 1934," Section 20 of IGST Act provides that provisions of CGST Act shall mutatis mutandis apply to IGST Act. 9. It is relevant now to examine the meaning assigned to the word 'financial institution' in clause (c) of Section 45-I of Reserve Bank of India Act, 1934. As per the said clause of RBI Act, 'financial Institution' is defined as under- "Financial Institution" means any non-banking institution which carries on as its business or part of its business any of the following activities, namely: (i) The financing, whether by way of making loans or advances or otherwise, of any activity other than its own; (ii) .......... .........." 10. It would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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