Q.53 we have some Carbon Credit (CER) which is to be sold to a customer located in India. What is the GST compliance, rate, HSN and if applicable is it under Forward charge or RCM. 

Ans. The concept of Carbon Credit Certificates is to a great extent similar to that of Priority Sector Lending Certificates (PSLCs).

PSLCs & Carbon Credit Certificates are treated as goods & are taxable @ 18% under chapter 4907 under schedule III of NN-01/2017 Central Tax Rate as per revised rates as on 12.01.2022.

PSLCs supplied by banks/ financial institutions to any registered person comes under the RCM mechanism.

Carbon Credit Certificates are similar to PSLCs but these two are not same & only PSLCs are specifically covered under RCM. Thus, Carbon credits will be taxable under forward charge.