NEW DELHI: The government has clarified that
priority lending certificates of banks are in the nature
of goods and liable to tax at the rate of 18% under GST.
Experts say by extension things like bitcoins, carbon
credits, etc. could become taxable under the GST.
“It has also been clarified that priority sector lending
certificates are subject to GST as 'goods' which could
have ramifications on things like bitcoins, carbon
credits etc,” said Pratik Jain, partner and
leader-indirect tax, PwC.
In a circular issued on Thursday, the department of
revenue said the RBI FAQ on Priority Sector Lending
Certificate or PSLC may be construed to be in the nature
of goods, dealing in which has been notified as a
permissible activity.
“In GST there is no exemption to trading in PSLCs. Thus,
PSLCs are taxable as goods at standard rate of 18% under
the residuary,” the circular said.