CGST Rule 38 of Central Goods and Services Tax Rules, 2017 – Claim of credit by a banking company or a financial institution

The Central Goods and Services Tax Act, 2017

The Central Goods and Services Tax Rules, 2017

Chapter-V Input Tax Credit

Rule 38: Claim of credit by a banking company or a financial institution.

38. 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[***]

References

Enforcement:

Enforced w.e.f. July 01, 2017 [Notification No. G.S.R. 663(E) dated 28.06.2017].

Amendments:

1. Omitted by Central Goods and Services Tax (Second Amendment) Rules, 2022 vide Notification No. 19/2022-Central Tax dated 28th September, 2022, w.e.f. 01.10.2022, the words “in FORM GSTR-2”.

2. Substituted by Central Goods and Services Tax (Second Amendment) Rules, 2022 vide Notification No. 19/2022-Central Tax dated 28th September, 2022, w.e.f. 01.10.2022, for the words “and shall be furnished in FORM GSTR-2”.

3. Omitted by Central Goods and Services Tax (Second Amendment) Rules, 2022 vide Notification No. 19/2022-Central Tax dated 28th September, 2022, w.e.f. 01.10.2022, the clause:

“(d) the amount referred to in clauses (b) and (c) shall, subject to the provisions of sections 41, 42 and 43, be credited to the electronic credit ledger of the said company or the institution.”