Priority Sector Lending Certificates, Renewable Energy Certificates etc attract Nil GST: CBIC [Read Circular]

GST Settlement of Funds

The Central Board of Indirect Taxes and Customs (CBIC) has clarified the GST rate applicable to Priority Sector Lending Certificates (PSLCs), Renewable Energy Certificates (RECs) and other similar scrips.

Earlier, in response to a FAQ, the Board clarified that MEIS and other scrips like SEIS and IEIS are goods classified under heading 4907 and attract 12% Goods Service Tax, which is the general Goods Service Tax rate for goods falling under heading 4907. Subsequently, the duty credit scrips classifiable under 4907 were exempted from Goods Service Tax, while stock, share or bond certificates and similar documents of title [other than Duty Credit Scrips], classifiable under heading 4907, attract 12% GST.

As per the present laws, various certificates like RECs, PSLCs etc are classified under heading 4907 and will accordingly attract Goods Service Tax @ 12 %, though duty paying scrips classifiable under the same heading will attract Nil Goods Service Tax.

“Accordingly, in modification of S.No. 3 of Circular No. 34/8/2018- GST dated 01.03.2018, it is hereby clarified that Renewable Energy Certificates (RECs) and Priority Sector Lending Certificates (PSLCs) and other similar documents are classifiable under heading 4907 and attract 12% GST. The duty credit scrips, however, attract Nil GST under S.No. 122A of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017,” the Board said.

Last month, the Central Government notified that the supply of priority sector lending certificates by the registered person would attract Goods and Services Tax (GST) under reverse charge mechanism.

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