<p><span>The Ministry of Finance's Circular No. 93/12/2019-GST, issued on March 8, 2019, clarifies the nature of supply of Priority Sector Lending Certificates (PSLCs) and the corresponding tax treatment. Below are the key highlights:</span></p><ol start="1"><li><span><strong>GST on PSLCs</strong>: The circular specifies that GST on the trading of PSLCs is to be treated as a supply of goods in the course of inter-State trade or commerce. Accordingly, Integrated GST (IGST) is payable on PSLC transactions carried out on the e-Kuber portal of the RBI for the periods from July 1, 2017, to May 27, 2018, and from May 28, 2018, onwards.</span></li><li><span><strong>Forward and Reverse Charge Mechanism</strong>: For the period from July 1, 2017, to May 27, 2018, the seller bank is liable to pay GST on a forward charge basis. From May 28, 2018, onwards, GST on PSLC trading is levied on a reverse charge basis, to be paid by the buyer bank, as per Notification No. 11/2018-Central Tax (Rate).</span></li><li><span><strong>No Double Taxation</strong>: Banks that have already paid Central GST (CGST) and State GST (SGST) or Union Territory GST (UTGST) for the periods mentioned will not be required to pay IGST for the same supply. This ensures that there is no double taxation on the supply of PSLCs.</span></li><li><span><strong>Implementation and Feedback</strong>: Any difficulties in implementing this circular should be reported to the Board. Trade notices should be issued to publicize the contents of the circular and ensure uniform implementation across the banking sector.</span> <a href="https://cms.plasament.com/storage/nisha/circular-cgst-93.pdf">circular-cgst-93</a><br> </li></ol>