TMI Blog2019 (3) TMI 1848X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 11/2017-CT (Rate) dated 28.06.2017 has been issued which notifies the central tax, on intra-state supplies of service description along with Tariff Heading in accordance with the scheme of classification is specified which are subject to specific conditions. The services for the right to use minerals including its exploration and evaluation, as per Serial No. 257 of the annexure appended to Notification No. 11/2017-CT (Rate), dated 28.06.2017 is included in group 99733 under Heading 9973. The royalty/dead rent paid/payable to the Government by the applicant is consideration against the transfer of right to use minerals including its exploration and evaluation as per the lease granted by the Government to the applicant. Rate of GST on given services provided by State of Haryana to M/s. Quality Earth Minerals Pvt. Ltd. for which royalty is being paid - HELD THAT:- The services for the right to use minerals including its exploration and evaluation, as per Serial No. 257 of the annexure appended to Notification No. 11/2017-CT (Rate), dated 28.06.2017 is included in group 99733 under heading 9973 and is covered under Serial No. 17(viii). Accordingly, as per Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance to the said lease deed the applicant is required to deposit a monthly and an annual return in specified format i.e. MMP1 and MMP2 respectively wherein it has been asked to submit information about quality of minerals raised and dispatched from leased mines along with other information. 1.8 That in terms of the executed lease agreement the applicant is required to pay in addition to the annual dead rent , amount to the extent of 10% as rural development fund (for rehabilitation of environment). 1.9 That in light of above, the applicant wants to understand what is the nature of service which has been provided by The State Government of Haryana to it along with the rate of GST on it. Accordingly, the applicant has framed the following questions:- i) 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. Quality Earth Minerals Pvt. Ltd., 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineral extracted and removed is being mentioned and royalty is being paid on said basis only. Thus is evident from the said definition and procedure also that royalty is being charged by the state government for transfer of right to use minerals. 2.6 That now with the amendment in entry for the HSN 9973 the clause (viia) has been added and clause (viii) has been amended. As the service is not in relation to the renting of property, but since it still belongs to HSN 9973 and the exact classification of service is 997337, thus it shall classify as either transfer of right to use goods or leasing or hiring of goods i.e. minerals extracted in this case. The rate of GST in such case shall remain as applicable on supply of minerals which is 5%. 2.7 That it is stressed that given service can fall under category of Serial No. 17 (iii), (iv) or (viia) because these services are in relation to goods. The minerals in question are also goods and since these rights have been given in respect of given minerals only, hence for the purpose of GST rate, the given service can fall under Entry No. 17 (iii),(iv) or (viia) but not (viii). 2.8 That in light of aforesaid facts and precedents it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, the classification of services in accordance with Notification No. 11/2017-CT (Rate) 28.06.2017, according to applicant is covered at Serial No. 17 of the notification. 3.2 A perusal of classification of services shows that services of right to use natural resources classify under tariff 9973 and description of services under Serial No. 17 (i) to (vii) does not cover such services of right to use minerals. Further, the Serial No. 17 (viia) as introduced vide Notification No.27/2018 CT (Rate) dated 31.12.2018 is reproduced below for better understanding: Sr.No. Chapter, Section or Heading Description of Service Rate (percent) Condition (1) (2) (3) (4) (5) 17 Heading 9973 (leasing or rental services with or without operator) (vii) time charter of vessels for transport of goods 2.5 Provided that credit of input tax charged on goods (other than on ships vessels including bulk carriers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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