TMI Blog2019 (7) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... discharge GST on same? - HELD THAT:- As the applicant is recipient of the services provided by the State of Rajasthan he is liable to pay GST on reverse charge basis under entry number 5 of the Notification No 13/2017-CT (Rate) dated 28.06.2017 and is not covered by exclusion clause number (1) of entry No.5 of the said Notification. Whereas the Excess Royalty Collection Contractor (ERCC) by way of assigning the right to collect royalty on behalf of the State Government on the mineral dispatched by the-mining lease holders. However as per the Notification No 14/2018-CT (Rate) dated 28.07.2018 the services supplied by State Government to ERCC for collection of Royalty became exempt - whether M/s. Vinayak Stone Crusher is taxable person in this case to discharge GST under reverse charge mechanism? - HELD THAT:- The services supplied by State Government of Rajasthan to Excess Royalty Collection Contractor (ERCC) by way of assigning the right to collect royalty on behalf of the State Government is exempted with certain restrictions by way of Notification No. 12/2017-Central Tax (Rate) dated 28-6-2017 as amended by Notification No. 14/2018-CT (Rate) dated 26.07.2018, However, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o GST on their supply at the rate of 5%. c. That the applicant has been granted a mining lease for extracting Rough Boulder of Stone from the mining at Village-Chak Gurjar Balai, Tehsil-Roopwas District-Bharatpur (Rajasthan) by the Rajasthan State Government on various terms and conditions as per the Lease deed. d. That the State Mining Department of Rajasthan Government, collect the royalty at the time of dispatch of boulder from the mining place. However the State Mining Department of Rajasthan Government, has appointed the Contractor M/s. Kishore and Party for collection of Royalty on behalf of Mining Department, The contractor collect the royalty on boulder from the recipient of the boulder. 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 Vinayak Stone Crusher for which royalty is being paid? 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assigning the right to collect royalty on behalf of the State Government is exempted by way of Notification No 14/2018-CT (Rate) dated 28.07.2018. The mining holders are not exempted from the above said Notification. The applicant is taxable person in this case to discharge GST under reverse charge mechanism. 5. FINDINGS, ANALYSIS CONCLUSION: a. We observe that, the applicant is engaged in business of crushing of Boulder resulting in to Brocken or crushed Stone, Ballast in the State of Rajasthan. The said product Boulder is classifiable under Tariff Heading 2516 and broken or crushed stone, ballast products are classifiable under Tariff Heading 2517 and are leviable to GST on their supply at the rate of 5%. b. We observe that for having assigned the rights to use the natural resources, the licensee companies are required to pay consideration in the form of annual license fee, lease charges, royalty, etc to the Government. The activity of assignment of rights to use natural resources is treated as supply of services and the licensee is required to pay tax on the amount of consideration paid in the form of royalty or any other form under reverse charge mechan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to use minerals including its exploration and evaluation 258 997338 Licensing services for right to use other natural resources including telecommunication spectrum 259 997339 Licensing services for the right to use other intellectual property products and other resources nowhere else classified e. The service undertaken by the applicant falls at item (viii) at serial No. 17 of Notification No. 11/2017 CT (Rate), dated 28.06.2017 (as amended from time to time) which attracts 18% GST (9% CGST+ 9% SGST). The relevant portion of the serial no. 17 for item (viii) of Notification No. 11/2017-CT (Rate), dated 28.06.2017(as amended from time to time) is reproduced below: (e) against serial number 17, for item (viii) in column (3) and the entries relating thereto in columns (3), (4) and (5), the following shall be substituted, namely: - Description of Service Rate (per cent.) Condition (3) (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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