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2019 (4) TMI 1940 - AAR - GSTMaintainability of application - time limitation expired for applicant who was to appear before this Authority - Rate of GST - Mineral Mining Rights in lieu of which royalty is being paid - whether taxable at the rate of 5% (Rate applicable on extracted raw material) or 18% (Residual category)? - HELD THAT - In order to decide the admissibility of the application, the applicant was called upon to appear before this Authority on 12.04.2019 vide memo no. 664 dated 09.04.2019, but none appeared on behalf of the applicant. Thereafter, notice of appearance was sent for 22.04.2019 vide memo no. 676 dated 16.04.2019. The applicant failed to appear on the 22.04.2019 said date also - Since, the Authority for Advance Ruling is bound to pronounce ruling within 90 days of the receipt of application as per Section 98(6) of the CGST/HGST Act. The applicant cannot be granted any further opportunity of hearing. Hence, the application of Advance Ruling is rejected under Section 98(2) of the CGST/HGST Act.
Issues:
1. Classification of GST rate for Mineral Mining Rights - 5% or 18% Analysis: 1. Classification of GST rate for Mineral Mining Rights - 5% or 18%: The applicant, a mining company engaged in extracting minerals under a contract from the State Government of Haryana, raised a question regarding the appropriate GST rate for the Mineral Mining Rights they pay for. The company contended that since the Mineral Mining Rights are essential for extracting and supplying raw materials, they should be classified under the same category as the extracted raw material and subjected to GST at 5% instead of the residual category at 18%. The company highlighted that the Mineral Mining Rights constitute a significant portion (60-70%) of their total cost and are a primary input for their operations. However, the company, as the recipient of the service, is liable to pay GST on the Mineral Mining Rights under the Reverse Charge Mechanism (RCM) basis. The company sought clarification on whether they should discharge their GST liability at 5% (rate applicable on extracted raw material) or 18% (residual category) for the Mineral Mining Rights. Discussion: The Authority for Advance Ruling called upon the applicant to appear before them to decide on the admissibility of the application. Despite multiple notices for appearance, the applicant failed to attend the scheduled meetings. As per the provisions of Section 98(6) of the CGST/HGST Act, the Authority is mandated to pronounce a ruling within 90 days of receiving the application. Due to the applicant's non-appearance and the necessity to adhere to the statutory timeline, the Authority rejected the application under Section 98(2) of the CGST/HGST Act, as the applicant could not be granted any further opportunity for a hearing. In conclusion, the Authority for Advance Ruling, Haryana, rejected the application due to the applicant's non-appearance, thereby leaving the question regarding the appropriate GST rate for Mineral Mining Rights unanswered. The ruling emphasizes the importance of complying with procedural requirements and timelines in seeking advance rulings under the GST regime.
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