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2020 (3) TMI 239 - AAR - GSTClassification of services - services for the right to use minerals including its exploration and evaluation - classified under Service Code (Tariff) 9973, specifically under 9973 37 as licensing services for the right to use minerals including its exploration and evaluation or as any other service under the said chapter? - benefit of N/N. 11/2017-Central Tax (Rate), dated 28-6 2017 - Rate of GST - HELD THAT - It is settled position that the service in question does not fall at Serial No. 17(i) to 17(v) of the said notification. We further observe that the service in question is also not covered at Serial No. 17(vi) to 17(viia) of the said notification. In this context, our view gets further strengthened on pursuing the order dated 25-3-2019 passed by Rajasthan Advance Ruling Authority on the same issue in the case of M/s. Wolkem Industries Ltd 2019 (4) TMI 1498 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN . wherein it was held that service in question falls at (viii) of Serial No. 17 of Notification No. 11/2017 (as amended from time to time) which attracts GST @ 18% - thus, service in question shall fall under residual Entry 17(viii) of the said notification which attract GST @ 18% as on date. The Haryana Advance Ruling Authority in M/s. Pioneer Partners 2018 (9) TMI 1477 - AUTHORITY FOR ADVANCE RULING, HARYANA has categorically held that the service in question does not fall at Serial No. 17(i) to (v) of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 (amended from time to time) but fall at residual Entry No. 17(viii) of the said notification. The Haryana Advance Ruling Authority has passed the Ruling on the issue in hand on 29-6-2018 and the relevant provisions of Serial No. 17 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 (amended from time to time) - However, the advance ruling dated 29-62018 passed by the Haryana Advance Ruling Authority in the case of M/s. Pioneer Partners was according to the provisions relevant during the period in terms of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, however with the amendment in the said notification on 31-12-2018, the said advance ruling has no relevance as on date to the issue in hand.
Issues Involved:
1. Classification of service provided by Garhwal Mandal Vikas Nigam (GMVN) to the applicant. 2. Whether the service is classified under Service Code (Tariff) 9973, specifically under 9973 37. 3. Rate of GST on the given services provided by the State of Uttarakhand or GMVN to the applicant for which royalty is being paid. Detailed Analysis: Issue 1: Classification of Service Provided by GMVN The applicant sought an advance ruling on the classification of the service provided by GMVN. The service involves the right to use minerals, including exploration and evaluation. According to Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, the relevant classification falls under Service Code (Tariff) 9973 37 as "Licensing services for the right to use minerals including its exploration and evaluation." Issue 2: Whether the Service is Classified Under Service Code (Tariff) 9973, Specifically Under 9973 37 The service provided by GMVN is indeed classified under Service Code (Tariff) 9973 37, as it pertains to licensing services for the right to use minerals, including exploration and evaluation. This classification is supported by the table in Notification No. 11/2017-Central Tax (Rate), which lists "Licensing services for the right to use minerals including its exploration and evaluation" under Serial No. 257. Issue 3: Rate of GST on the Given Services The rate of GST applicable to the services provided by GMVN was determined to be 18% [9% CGST + 9% SGST]. This conclusion was based on the residual entry (viii) of Serial No. 17 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, which covers "Leasing or rental services, with or without operator," other than the specific entries listed from (i) to (vii). The services in question do not fall under any of the specific entries (i) to (vii) and thus default to the residual entry, attracting an 18% GST rate. Consideration of Other Advance Rulings The applicant referenced advance rulings from Haryana and Chhattisgarh to support their contention for a lower GST rate. However, these rulings were based on provisions that were relevant during their respective periods. The ruling from Haryana, dated 29-6-2018, initially held that the service should attract GST at the same rate as the extracted minerals (5%). However, this ruling was rendered irrelevant due to amendments in Notification No. 11/2017-Central Tax (Rate) on 31-12-2018. The Rajasthan Advance Ruling Authority, in a similar case, held that the service falls under the residual entry (viii) of Serial No. 17, attracting an 18% GST rate. Conclusion 1. The services rendered by GMVN are covered under Serial No. 257 of Annexure appended to Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, as "Licensing services for the right to use minerals including its exploration and evaluation." 2. The service is classified under Service Code (Tariff) 9973 37. 3. The rate of GST on the services provided by GMVN to the applicant, for which royalty is being paid, is 18% [9% CGST + 9% SGST].
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