Micro finance

Dear vijeesh

In term of sec 17(4) of cgst act, Financial institution or banks, engaged in supplying services by way of accepting deposit,extending loans or advances shall have the following 2 options for availing ITC-

1. Comply with the provision of section 17(2) of CGST Act , it states that where the goods or services or both are used for effecting taxable supplies including zero-rated supply (export) & partly for exempted supplies, then amount of credit is available to the proportion of taxable supplies. No credit is available in respect of of goods or services used for effecting exempted supplies.

2. Avail of , every month, an amount of equal to 50% of the ELIGIBLE input tax credit on all your inward supplies. no need to check for the exempted supplies to claim ITC .

NOTE:

1. as per proviso to sec 17(4) the option once exercised shall not be withdrawn during the remaining part of FY.                 

 2. Restriction of 50% itc is NOT apply in case if inward supply is from same person having same  ie Branch office