This circular provides clarification on the levy and payment of GST on the trading of Priority Sector Lending Certificates (PSLCs), in response to representations received from stakeholders.

The issues examined relate to the mechanism for discharge of GST liability on PSLC transactions during the period from 1 July 2017 to 27 May 2018, and the applicable rate of GST on such transactions.

After examination and with the approval of the GST Implementation Committee of the GST Council, it has been clarified that the supply of PSLCs during the said period is taxable under GST. The liability to pay GST is to be discharged by the seller bank under the forward charge mechanism. Accordingly, the seller bank is responsible for charging and paying GST on the transaction.

The applicable rate of GST on the trading of PSLCs for the period from 1 July 2017 to 27 May 2018 has been clarified as 12 percent.

Any difficulty faced in implementing these clarifications is to be brought to the notice of the Board for necessary action.