Input Tax Credit —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 (In short ?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 seek advance ruling, whether input credit of GST on this inward supply is just and proper under the GST law?

Held that— As per Rule 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 such procedure.—Uttar Bihar Gramin Bank, In Re… [2020] 25 TAXLOK.COM 096 (AAR-Bihar)