Mr. A is dealing in carbon credit. He sells carbon credit to international agencies. Provide material on this subject, applicability of GST and other laws

ANSWER

Facts of the case: Mr. A is dealing in carbon credit. He sells carbon credit to international agencies. Provide material on this subject, applicability of GST and other laws.

Law Applicable:

1. Notification No.1/2017-Central Tax (Rate)

Schedule I - 2.5%

2. Section 7 of CGST Act : scope of supply

1) For the purposes of this Act, the expression 'supply' includes-

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;

Interpretation:

The supply of carbon credit scrips is subject to GST because the same is covered under supply as given in section 7 of CGST Act, 2017.

Conclusion: GST will be charged on supply of carbon credit scrips. The carbon credit scrips should not be confused with the exemption given to duty credit scrips under notification no. 2/2017 Sl. No.122A because duty credit scrips is a different commodity.  (Reply dt. 25/11/2021)