The Government of Uttar Pradesh on October 30, 2026, issued a clarification on issues related to the provisions of section 17(4) of the Uttar Pradesh Goods and Services Tax Act, 2017.
The following has been stated: -
•The Commissioner of State Tax, Uttar Pradesh, has issued a clarification under Section 168(1) of the Uttar Pradesh Goods and Services Tax Act, 2017, regarding the applicability of Section 17(4) to banking companies, financial institutions and Non-Banking Financial Companies (NBFCs).
•It clarifies that the 50% Input Tax Credit (ITC) option is applicable only to registrations engaged in accepting deposits or extending loans and advances, while other registrations, such as those exclusively engaged in bullion trading, are neither required nor eligible to opt for the scheme.
•The relaxation under the second proviso to Section 17(4) is available only where the supplying and receiving registrations having the same Permanent Account Number (PAN) have opted for the scheme.
•The circular also prescribes procedures for ITC availment and reversal in FORM GSTR-3B, including reporting through the Invoice Management System (IMS), and advises authorities not to take an adverse view of different reporting methodologies followed in past periods, provided the ITC availed is consistent with the prescribed principles.
The detailed notification is given in the document below.
[Notification No.: GST/2026-27/121/State Tах]
