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TMI Blog2020 (8) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... non-banking financial company. Both the conditions shall be simultaneously satisfied to be eligible to exercise the option as provided under sub-section (4) of Section 17 of the CGST Act, 2017. Admittedly, the applicant is engaged in supplying services by way of accepting deposits, extending loans or advances. Therefore, the issue to be determined is whether the applicant qualifies to be a banking company, a financial institution or a non-banking financial company. The terms banking company, a financial institution or a non-banking financial company are not defined under the CGST Act, 2017. However, the terms are defined in the explanation to subsection (8) of Section 13 of the Integrated Goods and Services Act, 2017. Even though, the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) of the CGST/SGST Act. It is stated that the applicant is categorized as a financial institution as per Section 45-I(c) and 45-I(e) of RBI Act, 1934. 2. The applicant has sought advance ruling on the following: i. Whether the applicant is considered as a financial institution as envisaged under 17(4) of the CGST Act. ii. Whether the applicant is eligible for availing the option provided under Section 17(4) of the CGST Act which prescribes to avail an amount equal to 50% of eligible credit of input tax on inputs, capital goods and input services in that month and the rest shall lapse. 3. The authorized representative of the applicant was heard. The applicant states that they are collecting and paying tax on the services re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods and input services in that month and the rest shall lapse. 5. The applicant submits that the terms; financial institution , banking company and non-banking company are not defined under the CGST Act, 2017; but as per explanation to sub-section (8) of Section 13 of IGST Act 2017, the terms banking company and financial institution shall have the meaning assigned to it in clause (c) of Section 45-1 of the Reserve Bank of India Act, 1934. 6. According to Section 45-l(c) of RBI Act, 1934; financial institution means any nonbanking institution which carries on as its business or part of its business in financing, whether by way of making loans or advances or otherwise, of any activity other than its own. In order to qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges or amounts collected over and above the interest or discount would represent taxable consideration and hence liable to GST. Any other services rendered by the applicant which are not exempted are also liable to GST. Section 17(4). of the CGST Act, 2017 provides that a banking company or a financial institution including a nonbanking 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 and the rest shall lapse. The applicant is rendering taxable supply of services like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g loans or advances. Therefore, the issue to be determined is whether the applicant qualifies to be a banking company, a financial institution or a non-banking financial company. The terms banking company, a financial institution or a non-banking financial company are not defined under the CGST Act, 2017. However, the terms are defined in the explanation to subsection (8) of Section 13 of the Integrated Goods and Services Act, 2017. Even though, the definition in the explanation is for the purpose of that sub-section, the definition can be adopted in the instant case also as the terms are not elsewhere defined in the IGST Act or the CGST Act. The Explanation (b), (c) and (d) to sub-section (8) of Section 18 of the IGST Act, 2017 reads as fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e securities of a like nature; (iii) letting or delivering of any goods to a hirer under a hire-purchase agreement as defined in clause (c) of section 2 of the Hire-Purchase Act, 1972 (26 of 1972); (iv) the carrying on of any class of insurance business; (v) managing, conducting or supervising, as foreman, agent or in any other capacity, of chits or kuries as defined in any law which is for the time being in force in any State, or any business, which is similar thereto; (vi) collecting, for any purpose or under any scheme or arrangement by whatever name called, monies in lump sum or otherwise, by way of subscriptions or by sale of units, or other instruments or in any other manner and awarding prizes or gifts, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
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