Particulate Matter Permits are Taxed at 12% GST: GAAR

The applicant, M/s Randhir Dyeing and Printing Mills, is a partnership firm that manufactures and sells garments and fabrics, as well as the job work of dyeing and printing fabrics. The manufacture and the processing of the units are regulated by the Gujarat Pollution and Control Board (GPCB), under the Water Act and Air Act and the Environment (Protection) Act, 1986. The applicant is a participant in the Emission Trading Scheme (ETS) for Particulate Matter (PM) as regulated by GPCB.

The applicant filed an application before the Gujarat AAR to get an advance ruling on the following questions:

“(i) As to whether trading of Particulate Matter Permits vide Bill of Supply No. 1 dtd. 05.10.2024 is liable to tax under the GST Act or not?
(ii) If yes, then it is Goods or Services under the GST Act?
(a) If it is goods, then as to whether trading activity of Particulate Matter Permits is covered by which HSN Code and rate of GST?
(b) If it is services, then as to whether trading activity of Particulate Matter Permits is covered by which SAC code and rate of GST?”

As per the Gujarat AAR, the Particulate Matter Permits are goods under the GST Act and attract a 12% GST Rate. The HSN code of Particulate Matter Permits is 4907.