2024-VIL-29-AAAR
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SGST AAAR

GST - Andhra Pradesh AAAR - Classification of supply - Trading of Carbon Credits – Supply of activities relating to Afforestation, Reforestation and Revegetation - Whether the activities relating to Afforestation, Reforestation and Revegetation qualify as 'composite supply' with principal supply as 'Support services to agriculture, forestry, fishing, animal husbandry' under Sl. No 24 of Notification 11/2017-Central Tax (Rate) dated June 28, 2017 having SAC code 9986 – HELD - M/s. Shell Energy India Private Limited has agreed to support development of Appellant’s project by incurring expenses related to development and operational activities of the project with intention to be granted the full rights and title to 100% of the Verified Carbon Units - the appellant is making some supplies to SHELL and some supplies to Farmers - The law envisages that for an act to be categorized as a “Composite Supply” there should be a Principal Supply with other naturally bundled supplies to a single recipient. Whereas, in the transactions narrated by the Appellant, the supply provided to the Farmers is a distinct transaction between two parties - The disjoint supplies to multiple recipients cannot be claimed to be a “Composite Supply” in terms of Section 2(30) of the CGST Act, 2017 - though the aspect of Carbon Credits Trading is not in discussion, however, the fact remains that the entire focus of AIF is to obtain the Carbon Credits accruing to the Farmers so that the same could be supplied to SHELL for the consideration received – the Ruling passed by the Authority of Advance Ruling is upheld and the appeal is dismissed
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