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TMI Blog2019 (11) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... APMMCR, the applicant is required to pay dead rent or royalty (whichever is higher but not both). This activity of payment of dead rent or royalty is on supply of service (Licensing services for the right to use minerals including its exploration and evaluation) wherein the government of Andhra Pradesh is supplier and the applicant is recipient. The said service is classifiable under Licensing services for the right to use minerals including its exploration and evaluation at Serial No. 257, Heading 9973, Group 99733, sub heading 997337 of annexure Scheme of classification of Services to Notification No. 11/2017-CT (Rate) dated 28.06.2017 - the service undertaken by the applicant falls at item (viii) of serial no. 17 of notification no. 11/2017 dt:28-06-2017, further amended vide Notification No. 27/2018-Central Tax (Rate) dt:31-12-2018 and attracts 18% GST (9% CGST+ 9% SGST) w.e.f. 01.01.2019. The applicant is receiving leasing / licensing services from the government of Andhra Pradesh. Hence, provisions of reverse charge mechanism are applicable under the Notification No. 13/2017-CT (Rate), dated 28.06.2017 (as amended from time to time) of the CGST Act, 2017. - AAR No. 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and cess on LA ₹ 50/- and ₹ 950/ towards income tax. Applicant enclosed one of the letters issued by Deputy Director for persual. 3.3 The applicant has to pay advance royalty/seigniorage along with income tax to the mines department. The above royalty will be paid on estimated quantity extraction of big metal. The royalty is ₹ 75/- per QM and have to pay 30% of ₹ 75/- towards DMF and 2% of ₹ 75/-towards merit fund and 2% of ₹ 75/ - towards TCS to the mines department. 3.4. Then after extracting the broken stone it will be shifted to crusher basing on the permit issued by the mines department to the applicant crusher to convert the large broken stone into aggregates of different sizes as per the use and the aggregates will be supplied to various parties. The supplies are accompanied by the permit issued by mines department and GSTIN invoice. The applicant has to discharge his liability under GST law on the amounts paid to the mines department towards dead rent, royalty, etc., under RCM as per Section 9(3) of CGST Act and APSGST act. 3.5 The applicant filed ARA-01 by paying the prescribed amount of fee and approached this authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. That along with the notification number 11/2017-CT(Rate)dated 28.06.2017, an annexure has also been appended with it which at Serial No.257 specify that the Group 99733 includes sub heading 997337 which is for:- Licensing services for the right to use minerals including its exploration and evaluation According to section 9 of Mines and minerals (Development and Regulation) Act, 1957 Royalties in respect of mining leases.- (1) The holder of a mining lease granted before the commencement of this Act shall, not withstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any [mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee] from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any [mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee] from the leased area at the rate for the time being specified in the Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the form of annual license fee, lease charges, royalty, etc to the Government. The activity of assignment of rights to use natural resources is treated as supply of services and the licensee is required to pay tax on the amount of consideration paid in the form of royalty or any other form under reverse charge mechanism. 6.3. The mining lease is governed by the AP Minor Minerals Concession Rules, 2017 (APMMCR). As per provisions of APMMCR, the applicant is required to pay dead rent or royalty (whichever is higher but not both). This activity of payment of dead rent or royalty is on supply of service (Licensing services for the right to use minerals including its exploration and evaluation) wherein the government of Andhra Pradesh is supplier and the applicant is recipient. The said service is classifiable under Licensing services for the right to use minerals including its exploration and evaluation at Serial No. 257, Heading 9973, Group 99733, sub heading 997337 of annexure Scheme of classification of Services to Notification No. 11/2017-CT (Rate) dated 28.06.2017. 6.4 . The relevant portion of the serial no. 17 for item (viii) of Notification No. 11/2017-CT (Rate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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