Case Law Details
In re The Knanaya Multi Purpose Co-operative Credit Society Ltd. (GST AAR KERALA)
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 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.
On a conjoint reading of the provisions of clauses (c) and (e) of Section 45-1 of the Reserve Bank of India Act, 1934 it is evident that the applicant being a Co-operative Society registered with the Central Registrar of Co-operative Societies carrying on the business of financing whether by means of making loans or advances or otherwise, of any activity other than its own qualifies to be a “financial institution” as per the Reserve Bank of India Act, 1934 and consequently also under the CGST Act, 2017.
Applicant satisfies both the conditions to be eligible for exercising the option provided under sub-section (4) of Section 17 of the Central / State GST Act, 2017.
In view of the observations stated above, the following rulings are issued:
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