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Notification No. 11/2018 – Central Tax (Rate) Explained

by Shakshi Bharti | Apr 4, 2024 | GST, 2018 Notifications, Central Tax 2018 Notifications, Notifications | 0 comments

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Important Keyword: Notification 11/2018 GST, PSLC GST rate, PSLC under RCM, Reverse charge on PSLC, GST on priority sector lending certificate, Section 9(3) CGST Act, GST financial services India,

Words: 955 Read time: 5 minutes.

[F. No. 354/ 124/ 2018- TRU]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)

New Delhi, the May 28th 2018

Notification No. 11/2018 - Central Tax (Rate): Seeks to amend notification No. 04/2017- Central Tax (Rate) dated 28.06.2017 so as to notify levy of Priority Sector Lending Certificate (PSLC) under Reverse Charge Mechanism (RCM)

GST: [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

G. S. R. (E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.4/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G. S. R. 676 (E), dated the 28th June, 2017, namely:-

In the said notification, after S. No. 6 and the entries relating thereto, the following serial number and the entries shall be inserted, namely: -

TABLE

S. No.	Tariff item, sub-heading, heading or Chapter	Description of Goods	Supplier of goods	Recipient of supply
(1)	(2)	(3)	(4)	(5)
7.	Any Chapter	Priority Sector Lending Certificate	Any registered person	Any registered person

(Pramod Kumar)
Deputy Secretary to
Government of India

Note: - The principal notification No. 4/2017 - Central Tax (Rate), dated the 28th June, 2017, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G. S. R. 676(E), dated the 28th June, 2017 and last amended by Notification No. 43/2017 - Central Tax (Rate) dated 14th November, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G. S. R. 1389 (E), dated the 14th November, 2017.

📚 Frequently Asked Questions (FAQs): Notification No. 11/2018 – Central Tax (Rate)

Q1: What is Notification No. 11/2018 – Central Tax (Rate)?

Answer:
It is a GST notification issued on 28 May 2018 that brought PSLC transactions under Reverse Charge Mechanism 11.

Q2: What is Priority Sector Lending Certificate (PSLC)?

Answer:
PSLC is a certificate traded between banks to meet RBI’s priority sector lending norms.

Q3: Who pays GST on PSLC?

Answer:
The recipient (buyer bank) pays GST under RCM 11.

Q4: Is PSLC treated as goods or services?

Answer:
PSLC is treated as supply of goods under “Any Chapter” classification in the notification 11.

Q5: Under which section is RCM applied here?

Answer:
Section 9(3) of CGST Act 11.

Q6: What GST rate applies to PSLC?

Answer:
PSLC attracts GST at standard rate applicable to financial instruments (generally 12% or 18% depending on classification at the time).
Banks must check latest rate notifications.

Q7: Can the recipient claim ITC on PSLC GST?

Answer:
Yes, subject to Section 16 conditions of CGST Act, if used in course of business.

Q8: How should PSLC RCM be reported in GSTR-3B?

Answer:
Show liability in 3.1(d)
Claim ITC in 4(A)(3)
Need help with GST Return Filing?
👉 https://finodha.in/gst-return-filing/

Q9: Does this affect non-banking financial companies (NBFCs)?

Answer:
Yes, if they are registered persons involved in PSLC transactions.
Need GST Compliance support?
👉 https://finodha.in/gst-compliance/

Q10: Is GST registration mandatory for PSLC trading?

Answer:
Yes, since both supplier and recipient must be registered persons 11.
Apply for GST Registration:
👉 https://finodha.in/online-gst-registration/

Q11: Why was PSLC brought under RCM?

Answer:
To shift compliance responsibility to recipient and ensure smooth tax collection.

Q12: Is this notification still applicable?

Answer:
Yes, unless superseded or amended by later notifications. Always check latest GST updates.

Q13: Does this apply to individuals?

Answer:
No. PSLC transactions typically occur between banks and registered financial institutions.

Q14: What happens if GST is not paid under RCM?

Answer:
Interest under Section 50 and penalty under Section 122 may apply.

Q15: Can PSLC be traded by a private limited company?

Answer:
Only eligible RBI-regulated entities can trade PSLC. If structuring a financial company:
👉 Register a Private Limited Company:
https://finodha.in/private-limited-company/
Ensure ROC Compliance:
https://finodha.in/roc-compliance-for-private-limited-company/