2020 (12) TMI 901 - AAR - GST

Permission for withdrawal of Advance Ruling application - levy of GST on the total amount being collected by them from Virat Associate LLP, which includes DMG Royalty, DMF Owner's Royalty, under forward charge mechanism or on Owner's Royalty only? - HELD THAT - The applicant vide their letter dated 23.11.2020, requested this authority to permit them to withdraw their application for advance ruling, quoting the reason that certain clauses of the MOU have been mended due to the ill effect of COVID-19 and consequential slow down of the business. The application filed by the Applicant for advance ruling is disposed off as withdrawn.

Summary

Issues:
1. Application for Advance Ruling under CGST and KGST Acts regarding GST liability on various royalties collected.

Analysis:
The applicant, a partnership firm holding a Building Stone Quarry Lease, entered into an MOU with another entity for stone extraction, agreeing on payment of Owner's Royalty along with GST. Additionally, the applicant collected DMG Royalty and DMF from the other entity, discharging GST under reverse charge mechanism as per Notification No.13/2017-Central Tax (Rate). The applicant sought clarification on whether GST should be paid on the total amount collected, including all royalties, or only on Owner's Royalty under forward charge mechanism. The applicant argued against double taxation, stating they should only pay GST on Owner's Royalty. After a hearing, the applicant withdrew the application due to amendments in the MOU caused by COVID-19's impact on business operations.

Therefore, the Authority for Advance Rulings, Karnataka, disposed of the application as withdrawn, without providing a ruling on the GST liability issue raised by the applicant.