Central Tax Circulars

CGST Circular 46/2018

To

The Principal Chief Commissioner/ Principal Directors General/Chief
Commissioner/ Directors General/Principal Commissioner/ Commissioner of
Central Excise and Central Tax (All) / Director General of Systems

Madam / Sir,

Subject:Applicable GST rate on Priority Sector Lending Certificates
(PSLCs), Renewable Energy Certificates (RECs) and other similar scrips
-regarding

1) Representations have been received seeking clarification regarding the
classification and applicable GST rate on the Renewable Energy
Certificates (RECs) and Priority Sector Lending Certificates (PSLCs).

2) Earlier, in response to a FAQ, it was clarified (vide advertisement
dated 27.07.2017), that MEIS and other scrips like SEIS and IEIS are
goods classified under heading 4907 and attract 12% GST, which is the
general GST rate for goods falling under heading 4907. Subsequently, the
duty credit scrips classifiable under 4907 were exempted from GST, while
stock, share or bond certificates and similar documents of title [other
than Duty Credit Scrips], classifiable under heading 4907, attract 12%
GST.

3) Later on, Circular No. 34/8/2018- GST dated 01.03.2018 (S.No.3) was
issued clarifying that PSLCs are taxable as goods at a standard rate
of 18 % under the residual entry S. No. 453 of Schedule III of
notification No. 01/2017-Central Tax (Rate).

4) As a result, there is lack of clarity on the applicable rate of GST on
various scrips/ certificates like RECs, PSLCs etc.

5) The matter has been re-examined. GST rate of 18 % under the residual
entry at S.No. 453 of Schedule III of notification No.
01/2017-Central Tax (Rate) applies only to those goods which are not
covered under any other entries of Schedule I, II, IV, V, or VI of the
notification. In other words, if any goods are covered under any of the
entries of Schedule I, II, IV, V, or VI, the GST rate applicable on them
will be decided accordingly, without resorting to the residual entry 453
of Schedule III.

6) As such, various certificates like RECs, PSLCs etc are classified
under heading 4907 and will accordingly attract GST @ 12 %, though
duty paying scrips classifiable under the same heading will attract Nil
GST{under S.No. 122A of Notification No. 2/2017-Central Tax (Rate) dated
28.06.2017, as amended vide Notification No. 35/2017-Central Tax (Rate)
dated 13.10.2017}.

7) Accordingly, in modification of S.No. 3 of Circular No. 34/8/2018- GST
dated 01.03.2018, it is hereby clarified that Renewable Energy
Certificates (RECs) and Priority Sector Lending Certificates (PSLCs) and
other similar documents are classifiable under heading 4907 and attract
12% GST. The duty credit scrips, however, attract Nil GST under S.No.
122A of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017.

8) If any difficulty is faced, the same should be brought to the notice
of the Board. Hindi version would follow.