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TMI Blog2024 (7) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... lty charges do not fall under the purview of mixed supply or composite supply but are two different and separate. The royalty charges collected by the applicant would fall under SAC 997337 and would attract 9% CGST and 9% SGST. The supply of aggregates manufactured from the boulders would fall under HSN code 251710 and attract CGST @2.5% and SGST @2.5%. - SRI. K. RAVI SANKAR, AND SRI. B. LAKSHMI NARAYANA, MEMBER Represented by : P. Ramesh, CA ORDER (Under sub-section (4) of Section 98 of Central Goods and Services Tax Act, 2017 and sub- section (4) of Section 98 of Andhra Pradesh Goods and Services Tax Act, 2017) 1. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and SGST Act, 2017 are in pari materia an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 amended from time to time. 3.3 M/s. Sudhakar Infra is collecting royalty from the quarry lease holders i.e. M/s. Pranathi Metals M/s. Pavithra Metals by charging GST at the rate of 18% under forward charge. M/s. Pranathi Metals and M/s. Pavithra Metals, actually perform mining operations and extract boulders. These boulders will be sold to the applicant. While issuing tax invoices for the sale of boulders, Metals and. M/s. Pavithra Metals are charging GST at the rate of 18% on royalty charges under HSN 997335 and GST at the rate of 5% under HSN 251710 on boulders value. A sample invoice is attached to this application. The applicant will supply the aggregates manufactured from boulders purchased to the customers. 3.4 The applicant also fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumer at the rates notified by the government for different minerals. 5.2 The tax invoice we are charging consideration for the supply of aggregates only. The consideration charged against royalty is mere reimbursement of royalty charges paid to the government since the royalty should be passed on to the final consumer. As you know there will be a track for the transportation of minerals from the leaseholder to the final consumer in the form of endorsed transit forms. A sample transit form is attached for your reference. 5.3 If we supply the aggregate without an endorsement of a transit form to any customer, the same would be illegal as the endorsed transit form is proof of payment of royalty on such mineral. Hence, we can say that endor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Invoices for the supply aggregates along with recovery of royalty charges at the rate of 5% under single HSN 2517, we may end up receiving a demand notice in the future under the allegation of short payment of tax on royalty charges. 6. Personal Hearing: The proceedings of Personal Hearing were conducted on 01.12.2023, for which the authorized representative, P. Ramesh, CA, attended and reiterated the submissions already made. 7. Discussion and Findings: We have examined the issues raised in the application in light of the facts and arguments submitted by the applicant. We have considered the submissions made by the applicant in their application for Advance Ruling. We have considered the issues involved from which advance ruling is sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices by way of grant of mineral exploration and mining rights .... 9.2.2 It may be noted that the expression same rate of tax as applicable on supply of like goods involving transfer of title in goods applies in case of leasing or renting of goods. In case of grant of mining rights, there Is no leasing or renting of goods. Hence, the said entry docs not extend to grant of mining rights which is an entirely different activity. 9.3.1 As regards classification of service, It was recommended by the Council that service by way of grant of mineral exploration and mining rights most appropriately fall under service code 997337, i.e. licensing services for the right to use minerals including its exploration and evaluation and were taxable @ 9% CGS ..... X X X X Extracts X X X X X X X X Extracts X X X X
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