CHAPTER V-INPUT TAX CREDIT

Rule 38

Claim of credit by a banking company or a financial institution

A banking company or a financial institution, including a non-banking financial company, engaged in the supply of services by way of accepting deposits or extending loans or advances that chooses not to comply with the provisions of sub-section (2) of section 17, in accordance with the option permitted under sub-section (4) of that section, shall follow the following procedure, namely,-

(a) the said company or institution shall not avail the credit of,-

(i) the tax paid on inputs and input services that are used for non-business purposes; and

(ii) the credit attributable to the supplies specified in sub-section (5) of section 17 1[****] ;

(b) the said company or institution shall avail the credit of tax paid on inputs and input services referred to in the second proviso to sub-section (4) of section 17 and not covered under clause (a);

(c) fifty per cent. of the remaining amount of input tax shall be the input tax credit admissible to the company or the institution 2[and the balance amount of input tax credit shall be reversed in FORM GSTR-3B];

(d) 3[****]

  1. Omitted (w.e.f. 01.10.2022) vide Notification No. 19/2022- CT dated 28.09.2022. ↩︎
  2. Substituted ​(w.e.f. 01.10.2022) vide Notification No. 19/2022 – CT dated 28.09.2022. ↩︎
  3. Omitted (w.e.f. 01.10.2022) vide Notification No. 19/2022 – CT dated 28.09.2022. ↩︎