ITC of GST on Premium paid to DICGC by Banks

In re Uttar Bihar Gramin Bank (GST AAR Bihar)

Applicant is engaged in the business of banking as a regional Rural Bank. It accepts deposit from its customers. It is statutorily require to pay premium to Deposit Insurance and Credit Guarantee Corporation (DICGC) on these deposits, on which GST is collected by the DICGC. Now the bank is availing and intends continue to avail credit of GST paid, as prescribed under respective GST Acts, as it is an inward supply for the purpose of its banking business. To avoid any future litigation, bank now seeks advance ruling, whether input credit of GST on this inward supply is just and proper under the GST law?

AAR held that Bank can avail ITC on fifty percent of GST paid on DICGC premium, as it is statutorily required for the bank to obtain insurance of deposit, which has only been accepted by it in the course of its business or furtherance of business. Claim is allowable under Section 17(4) of CGST Act, 2017.

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING

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