GST payable on Priority Sector Lending Certificates under Forward Charge till 27.05.2018: CBIC [Read Circular]

Priority Sector Lending Certificates - CBIC - GST - Taxscan

The Central Board of Indirect Taxes and Customs ( CBIC ), has clarified that the Priority Sector Lending Certificates would attract GST under forward charge from the period 1.7.2017 to 27.05.2018.

The CBIC missive issued on Wednesday said that the on supply of PSLCs, the seller bank should remit 12 per cent GST on its supply for the said period.

The CBIC issued the circular in the light of representations received from the stakeholders regarding the mechanism for discharge of tax liability on trading of Priority Sector Lending Certificate (PSLC) for the period 1.7.2017 to 27.5.2018 and the GST rate applicable on trading of PSLCs.

“The representations have been examined. With the approval of the GST Implementation Committee of the GST Council, it is clarified that GST on PSLCs for the period 1.7.2017 to 27.05.2018 will be paid by the seller bank on forward charge basis and GST rate of 12% will be applicable on the supply,” the Board said.

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

Priority Sector Lending Certificates is a tool for promoting comparative advantages among banks while they meet their priority sector lending obligations in India.

To Read the full text of the Circular CLICK HERE