2022-TIOL-70-AAR-GST
Singareni Collieries Company Ltd
GST - Applicant is entering into contracts with a host of vendors/suppliers for extraction of coal - Under rule (3) of State Forest Produce Transit Rules, they are liable to pay a certain amount to move the mined coal through the forest area as permit fee at the rate of Rs. 10 per ton of coal transported - Applicant is desirous of ascertaining whether GST is attracted on reverse charge on this amount paid to the Forest department and if payable whether the services can be held to be classifiable under Sr no. 17, heading 9973 [Leasing or rental services without operator] of 11/2017-CTR and thus be exigible to a lower rate of tax for the period prior to 01.01.2019.
Held: The facts of the case clearly reveal that the forest department is collecting transit fee to allow the transit of vehicles carrying coal through the forest area, thus this is covered under Entry 5(e) of the Schedule II to the CGST Act, 2017 wherein 'to do an act' is deemed to be a service - Forest department's act of allowing such vehicles through forest area is, therefore, covered under this head - Further, these services are not classifiable under heading 9973 of Notification No. 11/2017-CTR as the same relate to 'Leasing or rental services without an operator' whereas the present service relates to Entry 5(e) of Schedule II to the CGST Act, 2017 - Consideration received by the forest department is taxable on reverse charge basis vide Entry at Sr. no. 5 of 13/2017-CTR : AAR
- Application disposed of: AAR
2022-TIOL-69-AAR-GST
Singareni Collieries Company Ltd
GST - Applicant is entering into contracts with a host of vendors/suppliers for extraction of coal - Applicant seeks to know as to w hether royalty paid in respect of Mining Lease can be classified under "Licensing services for the right to use minerals including its exploration and evaluation falling under the heading 9973 attracting GST at the same rate of tax as applicable on supply of like goods involving transfer of title in goods" in terms of Sr. no. 17(viia) of 11/2017-CTR as amended and also as regards the liability to pay tax on contributions made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) as per MMDR Act, 1957.
Held: Tariff item '997337' enumerates 'licensing services for the right to use minerals including its exploration and evaluation' - This is the appropriate entry concerning royalty on mining, hence the rate of tax on the residual entry [Sr. no. 17(viii) of 11/2017-CTR] is which is attracted on the royalty paid for mining at the rate of 9% CGST & 9% SGST - Furthermore, the contributions made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) as per MMDR Act, 1957 are amounts paid in addition to the royalty payable and in a proportion to the royalty paid for extracting minerals from a contract of mining lease - Therefore they are consideration for the service of right to use minerals including its exploration and evaluation which is enumerated as tariff item '997337', this is same as royalty and hence attract tax at the rate of 9% CGST & SGST each: AAR
- Application disposed of: AAR |
