RAJASTHAN AAR CLARIFIES 18% GST ON MINING ROYALTY PAID TO STATE GOVERNMENT

RAJASTHAN AAR CLARIFIES 18% GST ON MINING ROYALTY PAID TO STATE GOVERNMENT

RAJASTHAN AUTHORITY FOR ADVANCE RULING

GOODS AND SERVICES TAX

Case Title- M/s Wolkem Industries Limited

(GST AAR RAJASTHAN)

Advance Ruling No. RAJ/AAR/2018-19/39

Date of Judgment/Order- 25th March 2019

IMPORTANT PARAGRAPHS

Para No. 2. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT
a. What is the classification of service provided in accordance with Notification No. 11/2017-CT (Rate) dated 28.06.2017 read with annexure attached to it, by the State of Rajasthan to M/s Wolkem Industries Limited for which royalty is being paid?
b. Whether said service can be classified under 9973 specifically under 997337 as Licensing services for the right to use minerals including its exploration and evaluation or as any other service?
c. What is the rate of GST on given services provided by the State of Rajasthan to M/s Wolkem Industries Limited for which royalty is being paid.

RULING

A. The activity undertaken by the applicant is classifiable under Heading 9973 (Leasing or rental services, with or without operator), as mentioned in the annexure at Serial No. 257(Licensing services for the right to use minerals including its exploration and evaluation) sub heading 997337 of notification number 11/2017-CT (Rate) dated 28.06.2017. The applicant is liable to discharge tax liability under reverse charge mechanism vide Notification No 13/2017-CT (Rate), dated 28.06.2017 (as amended from time to time) of the CGST Act, 2017.
B. The activity undertaken by the applicant attracts 18% GST (9% CGST+ 9% SGST).