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GST is the one Indirect tax which has eliminated the other indirect taxes in India. GST Law is a comprehensive, multi-stage, destination-based tax in India that had been passed into parliament on 29th March 2017. But it came into existence on 1st July 2017. It is levied on every value addition. In this regime of GST, the tax will be imposed on every step of sale whether it is intra-state sales, central GST or state GST. In the case of intra-state sales, GST will be integrated. This article will let you know how GST on NBFCs is prevailing in Indian companies. If you want to register GST then click here:
There are some provisions on NBFCs under GST which are given below:
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A non-banking financial company carrying on business in the supply of services by accepting deposits or extending loans shall not avail the credit of tax paid on inputs and inputs services that have been used for non-business purposes. Besides, it shall not be given a credit attributable to supplies specified in sub-section (5) of section 17 in form GSTR-2.
The non-banking financial institution shall avail the credit of tax paid on inputs and services as per sub-section (4) of section 17. From the remaining amount of input tax, 50% shall be the input tax credit admissible for the company. It must be furnished in FORM GSTR-2. The amount mentioned in clauses (b) and (c) shall be credited to the electronic credit ledger of the institution.
The amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies, Where the goods and services are used by the registered person partly for effecting taxable supplies including zero-rated supplies as prescribed under this Act.
If a non- banking financial institution carrying on its business by accepting deposits and extending loans then it is provided under the provision of sub-section (2) that the option once exercised shall not be withdrawn during the remaining part of the financial year. Provided further that the restriction of 50% shall not apply to the tax paid on supplies which are made by one registered person to another registered person having the same Permanent Account Number(PAN).
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