9911796707
TMI Blog2019 (11) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... R Projects and Engineers, (hereinafter referred to as applicant), registered under the Goods & Services Tax. 2. The provisions of the CGST Act and APGST Act are identical, except for certain provisions. Therefore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision under the APGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or AP GST Act would be mentioned as being under the GST Act. 3. Brief Facts of the case: 3.1. M/S. PKR projects and Engineers (herein after referred to as Applicant), situated at 19-56. NRPM Road, Yelleswaram, E.G. District, Andhra Pradesh -533429 is a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2% of Rs. 75/-towards merit fund and 2% of Rs. 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 approache ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid to the mines department towards dead rent, royalty, etc., under RCM as per Section 9(3) of CGST Act and APSGST act. The applicant interprets his stance as per the following legal provisions. The term "services" has been defined under Section 2(102). "services" means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged". That in exercise of power conferred under Section 9(1) of the CGST Act, 2017, notification number 11/2017-CT (Rate) dated 28.06.2017 has been issued which notifies the central tax, on intra-stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. According to the applicant the Royalty-or the Dead rent paid by the applicant to the Government is nothing, but an amount paid for getting right to use the minerals granted to it for a specified period. That in given transaction, the quarry from which broken stone extracted is granted by department of mines and geology. Hence, it has been argued that, the classification of services in accordance with Notification No 11/2017-CT (Rate) 28.06.2017, according to applicant is covered at Sr.No.17 of the notification. The applicant further claims that the perusal of classification of services shows that services of right to use natural resources classify under tariff 9973 since the description of service serial No. 17 (i) to (v) does not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rental services. with or without operator), as mentioned in the annexure at Serial No. 257(licensing services for the right to use minerals including its exploration and evaluation) and sub heading 997337 of notification number 11/2017-CT (Rate) dated 28.06.2017. The applicant is liable to discharge tax liability under reverse charge mechanism vide Notification no. 13/2017-CT (Rate), dated 28.06.2017 (as amended from time to time) of the CGST Act, 2017.
The activity undertaken by the applicant falls at item (viii) of serial no. 17 of notification no. 11/2017, which was 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. X X X X Extracts X X X X X X X X Extracts X X X X
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