The Government of West Bengal, on October 30, 2026, issued a clarification on issues related to the provisions of section 17(4) of the West Bengal Goods and Services Tax Act, 2017.
The following has been stated: -
•The Directorate of Commercial Taxes, West Bengal, has issued Trade Circular No. 06/2026, corresponding to Central Circular No. 261/07/2026-GST, under Section 168 of the West Bengal Goods and Services Tax Act, 2017, clarifying the applicability of Section 17(4) to banking companies, financial institutions and Non-Banking Financial Companies (NBFCs).
•It specifies that the option to avail 50% of eligible Input Tax Credit (ITC) applies only to registrations engaged in accepting deposits or extending loans and advances, while registrations exclusively engaged in activities such as bullion trading are excluded.
•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 through the Invoice Management System (IMS), and directs authorities not to take an adverse view of different ITC reporting methodologies followed in past periods, provided the total ITC availed is consistent with the prescribed principles.
[Circular No.: 06/2026]
