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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 ..... rse 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 breeding; (B) for increasing production and supply of better and improved animal feed including fodder; and (D) generally for the enhancement of the cattle wealth of the country (j) processing, promoting or financing technological, industrial or economic research in milk and milk products in such manner as the Board may deem fit by the utilization of available institutions or otherwise; (k) financing, in such mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 input services in that month and rest shall lapse 1.5 It is further submitted that the applicant is neither banking company nor non-banking financial institution which is clear from the NDDB Act and thus it is necessary to see that whether the applicant can be considered as financial institution or not, for taking benefits of tax credit. The applicant stated that there is no provision which sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put 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 and Services tax, Vadodara_ I Commissionerate, vide letter F.No. IV/16-12/GST/Adv.Ruling/Sec.97/T/2017-18 dated 3.11.2017 have offered comments on the issue under consideration. It is informed that Ministry of Finance (Department of Company Affairs) vide Notification dated 23.2.2004 has declared the NDDB as a Public Financial Institution under sub section (2) of Section 4A of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant 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 conditions as prevailing in market such as secured loans against hypothecation of stock and properties. 5. As per the submissions of the applicant, NDDB is neither banking company nor non-banking financial institution which is clear from the provisions of NDDB Act. However, considering the above said activities performed by them, it is to be examined as to whether NDDB can be as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 be seen that as per the activities performed by the applicant, narrated above, 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 23.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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