Delhi HC issues a notice regarding Circular levying GST on Renewable Energy Certificate Scrips

Source: GST Sutra

Delhi HC issued a notice to Revenue in writ challenging Circular No. 46/20/2018-GST levying 12% GST on Renewable Energy Certificate (REC) scrips. It noted the Petitioner’s argument saying that REC scrips are ‘securities’, excluded from both goods and services while listing for matter in July.

The matter was heard by Justice S. Ravindra Bhat and Justice Prateek Jalan. And, the petition was filed by Mr. Abhishek A Rastogi.

Writ Petition has been filed by a Power Company challenging Circular No. 34/8/2018-G8T, dated March 01, 2018 as modified by Circular No. 46/20/2018-GST, dated July 06, 2018 seeking to levy 12% GST on sale of Renewable Energy Certificate (REC) scrips.

Petitioner purchased these certificates to comply with the environmental norms and the certificates are derivatives based on the power generated in the green route.

The petitioner then argued taxability of RECs on the ground that RECs are securities which are excluded from both goods and services. These scrips are traded on IEX and PXIL Power exchanges and are electricity derivatives. Furthermore, the petitioner stated that the other problem is taxability of trading margins which arises after the retrospective amendment of Explanation to Section 2(102) of the CGST Act. It intends to tax trading margins of the intermediaries. The circular provides for taxability of RECs and PSLCs while taxability will have to be determined in light of the statutory provisions.

HC while issuing a notice to Revenue had posted the matter in July.