Income from sale of carbon credit certificate is required to reversal of cenvat credit under Rule 6(3)?

[Vijay Chitte]

Dear Professionals,

We are having a power plant & we are generating income from saling of excess carbon credit to the international market. We want to optn cenvat credit rule 6(3) option. (Propornationate reversal of cenvat credit on monthly basis)

My question is : Whether income from carbon credit certificates is required to be included, while, calculating total turnover under Cenvat creditrule 6(3)?

As per my view such income is neither manufacture, neither service & nor a trading activity, therefore not included in the total turnover under cenvat creditrule 6(3).

Pls. correct if i am wrong

Thanks

 

[Rajagopalan Ranganathan]

Sir,

Please clarify what are the duty paid inputs/input service are used in the sale of carbon credit certificate. In my opinion it is a mere sale of a commodity and will attract vat only.

AI Summary

Inclusion of carbon credit income in turnover under cenvat rule questioned; seller denies, respondent treats it as taxable sale. Whether income from sale of carbon credit certificates must be included in total turnover for calculation of cenvat credit proportionate reversal is queried. The taxpayer contends such receipts are neither manufacture, service nor trading and thus should be excluded. The respondent requests clarification on use of duty-paid inputs/input services and views the transaction as a sale of a commodity attracting value added taxation.