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TMI Blog2020 (8) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... e activity is supply and as per paragraph 5 (e) of schedule II it is a supply of services. Appellant has not contested it - these all payments are made in order to secure a mining or prospecting licence cum mining lease under the Act which are charged by Government. AAR has in its order also held that being a business entity the appellant is liable to pay tax on this supply of services under reverse charge mechanism as per notification 13/2017 central tax (rate) dated 28.06.2017. Hence, the order of AAR is confirmed. - MP/AAAR/01/2020/33 - - - Dated:- 27-8-2020 - SHRI V.K. SAXENA, AND SHRI RAGHWENDRA KUMAR SINGH, MEMBER PROCEEDINGS (Under section 101 of the Central Goods and Services Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017) At the outset, we would like to make it clear that the provisions of both the CGST Act and the MPGST Act are mirror image of each other except for certain specific provisions. Therefore, unless a specific mention is made to such dissimilar provisions, a reference to the CGST Act would mean a reference to the similar provisions under the MPGST Act and vice-versa. At places we may refer it as GST Act. The present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tributions made to DMF and NMET, we rule that the said contributions are nothing but additions to the royalty payable for the original supply itself, and is therefore liable to be added to the value of the original supply and treated accordingly for the purposes of GST. QUESTIONS RAISED BEFORE THE APPELLATE AUTHORITY FOR ADVANCE RULING (AAAR) The following question has been posed before the Appellate Authority with reference to the activity undertaken by the Appellant: - Appellant's liability to pay tax on contributions made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) as per Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act, 1957) ? GROUNDS OF APPEAL The Appellant has given grounds of appeal in pdf format which are as under: - PERSONAL HEARING The appellant was called for personal hearing on 22.07.2020 and 25.08.2020. He sought adjournment for both the dates. He did not avail of the opportunity of hearing though internet. Considering the time constrains the case is being decided as per written submissions on merit. DISCU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a consideration. d. Alternatively, since the trusts in question qualify neither as 'government' nor as local authority, there can no liability on the Appellant to pay tax under the reverse charge. 6. AAR in its order in para 7.16 has held as Further, section 9B and section 9C of the MMDR Act, which talk about contributions made to the DMF and NMET, state that such contributions are to be made by the holder of the mining rights in addition to the royalty , these contributions are also in the nature of royalty and as such are to be treated just like they were royalty. Per this view, the amounts payable to the DMF and NMET are nothing but payments of royalty, albeit by different name. 7. In para 7.17 AAR has held This authority is of the view that money payable to the Mt/. and NMET may be treated as nothing but royalty itself, since these contributions are described as being in addition to the payment of royalty, which itself is in respect of the mining rights. As such, therefore, such amounts are paid in respect of mining rights and the said supply is already deemed to be taxable under reverse charge basis. 8. Appellant is required to explain and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strict Mineral Foundation shall be to work for the interest and benefit of persons, and areas affected by mining related operations in such manner as may be prescribed by the State Government. (3) The - - - . (4) The State Government - - - . (5) The holder of a mining lease or a prospecting licence-cum-mining lease granted on or after the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, shall, in addition to the royalty, pay to the District Mineral Foundation of the district in which the mining operations are carried on, an amount which is equivalent to such percentage of the royalty paid in terms of the Second Schedule, not exceeding one-third of such royalty, as may be prescribed by the Central Government. (6) The holder of a mining lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, shall, in addition to the royalty, pay to the District Mineral Foundation of the district in which the mining operations are carried on, an amount not exceeding the royalty paid in terms of the Second Schedule in such manner and subject to the categorization of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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