PSLC trading by banks on e-Kuber to attract IGST

pigy-bank-e1485256383904.jpg

No need to pay if CGST/SGST has already been paid

Trading of priority sector lending certificates (PSLCs) on the government’s e-Kuber portal by banks will attract integrated goods and services tax (IGST). However, if the bank has already paid Central and State GST for the transaction, then it will not have to pay IGST.

“Nature of supply of PSLC between banks may be treated as a supply of goods in the course of inter-State trade or commerce,” the Central Board of Indirect Taxes and Customs (CBIC) has now clarified, adding that accordingly IGST will have to be paid for the period between July 1, 2017, and May 27, 2018, and from May 28, 2018, onwards.

The clarification comes after the CBIC received representations from a number of banks on whether GST has to be paid for trading of PSLC on the e-Kuber portal of the Reserve Bank of India. PSLCs are aimed at encouraging banks to lend more to priority sectors, such as agriculture, small and marginal farmers and micro enterprises. About 40 per cent of the total lending of banks has to be to these sectors. Banks that do higher lending can issue these certificates, which can be bought by banks that have a shortfall in their priority sector lending. These are traded on the RBI’s e-Kuber portal.

Last year, CBIC had clarified that there is no exemption to trading in PSLC under GST. An 18 per cent GST is charged on PSLC, which has been considered as goods, on a reverse charge basis, and would be paid by the buyer bank.

Source: https://www.thehindubusinessline.com/money-and-banking/pslc-trading-by-banks-on-e-kuber-to-attract-igst/article26524709.ece

Leave a Reply

Your email address will not be published.

Solve this and then Post Comment *

scroll to top