This circular provides clarification on the nature of supply and applicable GST in respect of trading of Priority Sector Lending Certificates (PSLCs) by banks through the RBI’s e-Kuber portal.

The circular clarifies that PSLCs traded between banks are to be treated as a supply of goods in the course of inter-State trade or commerce. Accordingly, Integrated GST (IGST) is payable on such transactions, irrespective of the location of the buyer and seller banks.

It is reiterated that for the period from 1 July 2017 to 27 May 2018, GST at the rate of 12% was payable by the seller bank on a forward charge basis, as clarified earlier. For transactions from 28 May 2018 onwards, GST is payable on a reverse charge basis by the buyer bank, in terms of the relevant notification. In both periods, however, the applicable tax is IGST.

The circular further clarifies that where banks liable to pay GST have already discharged tax in the form of CGST and SGST or CGST and UTGST for such supplies, they will not be required to pay IGST again for the same transactions.

This clarification aims to remove ambiguity and ensure uniform GST treatment of PSLC trading.