2020 (6) TMI 521 - AAR - GST

Rate of GST - royalty payable to Govt of Uttarakhand under RCM in respect of Reta, Bazri Boulders extracted as per the permission of Govt authorities - HELD THAT - The issue in hand has already been decided in 2020 (3) TMI 239 - AUTHORITY FOR ADVANCE RULING - UTTARAKHAND wherein it was held that service in question falls in residual entry 17(viii) of Heading 9973 of said Notification and on perusal of aforesaid tables, we find that the said entry was amended vide Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018 (applicable w.e.f 01.01.2019) which implies that the service in question provided during the period 01.07.2017 to 31.12.2018 attract GST at the same rate of central tax as on supply of like goods involving transfer of title in goods and w.e.f 01.01.2019 the said service attract GST @ 18%. Since the transfer of title in goods attract GST @ 5%, therefore the supply of service in question also attract GST @ 5% during the period 01.07.2017 to 31.12.2018.

Summary

Issues:
- Determination of tax liability on royalty payable to Govt of Uttarakhand under RCM for extracted minerals.

Analysis:
1. The application sought an advance ruling on the applicable rate of GST on royalty payable to the Government of Uttarakhand under RCM for extracted minerals. The applicant, a government body, is the sole agency for removal and sale of forest produce in Uttarakhand, including the extraction of minor minerals like Reta, Bazri, and Boulders. The applicant pays royalty to the state government and deposits GST under RCM at 18% while collecting 5% on the sale price.

2. The Authority for Advance Rulings reviewed the relevant provisions of the CGST/SGST Act, 2017, specifically Section 97(2)(e), which allows seeking an advance ruling on the determination of tax liability. The applicant's case was admitted based on this section, and a hearing was conducted with the concerned officer present.

3. The Authority referred to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, which was later amended by Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018. It was noted that the service in question falls under entry 17(viii) of Heading 9973, attracting GST at the same rate as on the supply of like goods involving the transfer of title in goods until 31.12.2018, and at 18% from 01.01.2019.

4. The classification and applicable rates of GST for the goods involved (sand, gravel, and stone boulders) were provided, with each attracting a GST rate of 5% due to the transfer of title in goods. Therefore, the service provided by the applicant during the period 01.07.2017 to 31.12.2018 also attracted GST at 5%, while from 01.01.2019 onwards, it attracted GST at 18%.

5. Based on the detailed analysis and findings, the Authority for Advance Rulings concluded that the services rendered by the applicant during the specified periods would attract GST at the applicable rates based on the transfer of title in goods, i.e., 5% until 31.12.2018 and 18% from 01.01.2019 onwards.