Drafting anomaly & reference in the Rule 3

Rule 3(b) of draft GST ITC Rules provides that banking company or a financial institution shall avail the credit of tax paid on inputs and input services referred to in the second proviso to sub-section (4) of Section 16 and not covered under clause (a).

Issue

The Rule 3 pertaining to claim of credit by a banking company or a financial institution makes wrong reference of provisions in clause (b). It is pertinent to mention that there is no proviso to sub-section (4) of Section 16.

Suggestion

It is suggested that the wrong reference so provided in clause (b) be corrected.

Source ICAI Suggestions on GST Rules Submitted to Govt of India