TMI Blog2018 (9) TMI 1477X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of tax as applicable on supply of like goods involving transfer of title in goods. What is the rate of GST on given services provided by State of Haryana to M/s. Poineer Partners for which royalty is being paid? - Held that:- Service charge by way of annual dead rent or royalty paid for services of granting right to use mineral would attract GST rate as applicable on supply of mineral which is being extracted through such mining - That the minerals which are extracted from the mine are classifiable under Tariff Heading 2516 and leviable to GST @ 5%. Whether services provided by State Government of Haryana is governed by applicability of Notification No 13/2017-CT (Rate) dated 28.06.2017 under entry number 5 and whether M/s. Poineer Partners is taxable person in this case to discharge GST under reverse charge mechanism or whether given service is covered by exclusion clause number (1) of entry no 5 and State Government of Haryana is liable to discharge GST on same? - Held that:- The applicant has misconstrued the entry which in fact casts a liability of tax to be discharged by the recipient on reverse charge basis - the applicant is liable to discharge the tax liability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Stone along with associated minor minerals at village Pichopa Kalan , Distt. Bhiwani, Haryana by the State Government on various terms and conditions as per the LOI and Lease deed (Annexure-4). 4. That further-in accordance with the Part-Ill ( Covenants of the Lessee ) in para 3(a) of the Lease deed it has been agreed that the bid amount of ₹ 16.46 cr shall become annual dead rent as amount agreed to be paid by lessee and the rate of same shall increase depending upon the terms of auction, Further, 3 rd proviso to para 3(a) of Part-III of the executed lease deed provide:- Provided further that lessee/lessees shall be liable to pay the dead rent or royalty in respect of each mineral, whichever is higher but not both. 5. That under para 5 to part-III of the executed lease deed the Mode of payment of dead rent/royalty and surface rent has been decided wherein it has been agreed that. a. The applicant shall deposit one advance instalment of dead rent before commencement of mining operations. b. Royalty on the mineral excavated and dispatched at the rate specified in the first schedule or dead rent, whichever is more and not both on monthly basis. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhiwani and is supplying the same under Tariff Heading 2516 attracting 5% GST (2.5% CGST + 2.5% HGST). As per section 9 (3) of the HGST Act, 2017 GST is payable on the royalty amount under RCM by the recipient of such services. The royalty/lease deed comes under the category of supply of services and general rate of tax @18% is applicable. Record of Personal Hearing Personal hearing in the case was conducted on 20.06.2018 which was attended by Sh. Yash Dhadda, CA, (POA). Sh. Jagjit Singh, DETC (ST), Bhiwani was also heard. The applicant had reiterated the submissions made in their application. After detailed discussions the application was admitted being covered by clause (a) (b) of section 97 (2) of the CGST/HGST Act 2017. As regard merits, the decision was reserved which is being released today. Discussion and finding of the authority For the purpose of understanding the questions involve, the applicant has highlighted the following relevant provisions of the law. 1. Section 9 of the CGST Act 2017 which is charging section of Goods Services Tax states: 9(1) Subject to provisions of sub-section (2), there shall be levied a tax called the central go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s applicable on supply of like goods involving transfer of title in goods. 7. That on the basis of above, it is evident that service charge by way of annual dead rent or royalty paid for services of granting right to use mineral would attract GST rate as applicable on supply of mineral which is being extracted through such mining. 8. That the minerals which are extracted from the mine are classifiable under Tariff Heading 2516 and leviable to GST @ 5%. 9. The applicant has also argued that in view of Sr. No.5 of notification no. 13/2017CT (Rate) dated 28.06.2017, the recipient of service is not liable to discharge any GST. In our considered view, the applicant has misconstrued the entry which in fact casts a liability of tax to be discharged by the recipient on reverse charge basis. Advance ruling under section 98 of the CGST/HGST Act 2017 In the backdrop of above discussions and findings the advance ruling on the questions is pronounced as under: - 1. 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 Haryana to M/S Pioneer Partners for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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