GST On Priority Sector Lending

Priority Sector Lending  is an crucial role assigned by RBI bank to banks for giving specified portions of bankers lending to specified sectors. These sectors are listed by RBI bank after discussion with central government. RBI play key important role to choose Priority Sector Lending. Therese sectors are

1. Agriculture
2. micro and small enterprises
3. Poor people for housing
4. Student education

RBI mentioned that bankers lending to priority sector should be 40 % of the Net Adjusted Credit. GST On Priority Sector Lending come in picture due to GST is applicable on supply of goods and services.

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Applicability of GST On  Priority Sector Lending

Applicability of GST On Priority sector lending certificate arises due to on supply of goods and services GST Is applicable. Point is whether PSLC is Goods or Services ? As per section 2(52) of CGST act, goods means every kind of movable property other than money and securities but includes actionable claims, growing crops and things attached to earth or forming part of earth. GST department received representation for applicblity of GST On Priority Sector Lending. In committee of GST Councile it is clarified that GST on PSLC 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.

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GST Rate on Priority Sector Lending Certificate

GST Rate on Priority Sector Lending Certificate

GST rate as PSLC @ 12 %

CIRCULAR No.62/36/2018-GST

F. No. 354/124/2018-TRU
Government Of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs

New Delhi, 12th September, 2018

To

The Principal Chief Commissioners / Chief Commissioners/ Principal Commissioners/ Commissioner of Central Tax (All) /
The Principal Director Generals/ Director Generals (All). Madam/Sir,

Subject: Levy of GST on Priority Sector Lending Certificates (PSLC) – regarding

Representations have been received requesting to clarify the following:

(i) Mechanism for discharge of tax liability on trading of Priority Sector Lending Certificate (PSLC) for the period 1.7.2017 to 27.5.2018.

(ii) GST rate applicable on trading of PSLCs.

2. 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.

3. Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board immediately.

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