The Department of Revenue has clarified the issue regarding nature of supply of Priority Sector Lending Certificates (PSLC) between banks.
For further clarification whether IGST or CGST / SGST is payable for trading of PSLC by the banks on e-Kuber portal of RBI, the Department of Revenue stated that Circular No. 62/36/2018-GST dated September 12, 2018 was issued clarifying that GST on PSLCs for the period July 1, 2017 to May 27, 2018 will be paid by the seller bank on forward charge basis and GST rate of 12% will be applicable on the supply. Further, Notification No. 11/2018-Central Tax (Rate) dated May 28, 2018 was issued levying GST on PSLC trading on reverse charge basis from May 28, 2018 onwards to be paid by the buyer bank.
It has been further clarified that nature of supply of PSLC between banks may be treated as a supply of goods in the course of inter-State trade or commerce. Accordingly, IGST shall be payable on the supply of PSLC traded over e-Kuber portal of RBI for both periods that is July 01, 2017 to May 27, 2018 and from May 28, 2018 onwards. However, where the bank has already paid CGST / SGST or CGST / UTGST, will not be required to pay IGST towards such supply.
[Circular No. 93/12/2019-GST]
Click here to download the Circular.