The Hindu Business Line : Call to exempt carbon credit from taxes

Visakhapatnam April 20 The Vizag-based Institute for Solid Waste Research and Ecological Balance (INSWAREB) has urged the Union Government to exempt carbon credit earnings from income tax as well as service tax and to issue separate GOs to dispel all doubts on these issues.

Dr N. Kalidas, the head of the institute, made the plea in a letter addressed to the Union Minister for Commerce and Industry, Mr Kamal Nath. The copy of the letter was released to the press here on Friday.

Reminding Mr Kamal Nath that when he was the Minister for Environment in the nineties, he was aggressively promoting the adoption of eco-friendly technologies, Dr Kalidas said in the letter that he (the Commerce and Industry Minister now) should show more consideration to industrial units generating carbon credit revenue.

Fly ash brick tech

He said in the letter that more than 3,000 small-scale units were working throughout the country, adopting the FaL-G technology (fly ash brick tech) promoted by the INSWAREB.

"It is an eco-friendly technology for fly ash brick manufacture, avoiding the use of energy and thereby eliminating carbon emissions. We have taken up the activity of carbon credits for promoting clean development mechanism (CDM) projects in various industrial segments. We have signed an agreement with the World Bank for offering 6-lakh tonnes of carbon credits generated through FaL-G brick activity and we have been funding over a 100 SSIs for the purpose. The lion's share of the revenue goes to the SSIs," he said in the letter.

`Need clarity'

As tax experts had interpreted the activity as deemed exports, he said, sales tax had been waived. "But there is no clarity on income tax and service tax. Clear, separate GOs should be issued dispelling all doubts. We appeal to the Union Commerce Ministry as well as the Union Environment Ministry to act expeditiously on the matter," he pleaded.

Dr Kalidas said that roughly 200 tonnes of coal should be burnt for the manufacture of a million clay bricks (or equivalent to 1,540 cubic metres of blocks) and "it results in 356 tonnes of carbon credit per million bricks."

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