The contributions to National Mineral Exploration Trust (NMET) and District Mineral Foundation (DMF) qualify as consideration towards supply of mining service by Andhra Pradesh Government and they being includible under value of supply, are chargeable to GST under the Reverse Charge Mechanism in the hands of the applicant, i.e., service recipient.
Levy of GST— In the instant case, applicant seeks clarification on two issues
a) Whether the contribution to National Mineral Exploration Trust (NMET) and District Mineral Foundation (DMF) would qualify as consideration towards supply of mining service.
b) If so, whether it is consequently included for purpose of value of supply chargeable to GST under the Reverse Charge Mechanism in the hands of the applicant, i.e., service recipient.
As per Sec. 7 of CGST Act, 2017, GST is applicable on any supply which is made for a consideration by a person in the course or furtherance of business. The activities undertaken by the trust for the welfare of the affected families can be treated as vocation and thereby it satisfies the definition of the term business and the amount received by the trust can be called as consideration as the person who is receiving the supplies and the person who is paying the amount of consideration need not be same under GST. Hence, the activity undertaken by the trust satisfies the definition of supply.
the argument of the applicant that Royalty is only a measure of NMET and DMF contributions and cannot be equated with NMET and DMF and that NMET and DMF are not in respect of single supply of service i.e. licensing that warrants clubbing of all amounts i.e. Royalty, NMET and DMF under section 15 of the GST law for the purpose of valuation does not hold good.
As per Entry No. 5 of Notification 13/2017 dated 28th June 2017, GST on services supplied by Central Government State Government or Local Authority, to a business entity needs to be paid by such business entity under RCM.
Held that— The contributions to National Mineral Exploration Trust (NMET) and District Mineral Foundation (DMF) qualify as consideration towards supply of mining service by Andhra Pradesh Government and they being includible under value of supply, are chargeable to GST under the Reverse Charge Mechanism in the hands of the applicant, i.e., service recipient.
The contributions to National Mineral Exploration Trust (NMET) and District Mineral Foundation (DMF) qualify as consideration towards supply of mining service by Andhra Pradesh Government and they being includible under value of supply, are chargeable to GST under the Reverse Charge Mechanism in the hands of the applicant, i.e., service recipient.
Levy of GST— In the instant case, applicant seeks clarification on two issues
a) Whether the contribution to National Mineral Exploration Trust (NMET) and District Mineral Foundation (DMF) would qualify as consideration towards supply of mining service.
b) If so, whether it is consequently included for purpose of value of supply chargeable to GST under the Reverse Charge Mechanism in the hands of the applicant, i.e., service recipient.
As per Sec. 7 of CGST Act, 2017, GST is applicable on any supply which is made for a consideration by a person in the course or furtherance of business. The activities undertaken by the trust for the welfare of the affected families can be treated as vocation and thereby it satisfies the definition of the term business and the amount received by the trust can be called as consideration as the person who is receiving the supplies and the person who is paying the amount of consideration need not be same under GST. Hence, the activity undertaken by the trust satisfies the definition of supply.
the argument of the applicant that Royalty is only a measure of NMET and DMF contributions and cannot be equated with NMET and DMF and that NMET and DMF are not in respect of single supply of service i.e. licensing that warrants clubbing of all amounts i.e. Royalty, NMET and DMF under section 15 of the GST law for the purpose of valuation does not hold good.
As per Entry No. 5 of Notification 13/2017 dated 28th June 2017, GST on services supplied by Central Government State Government or Local Authority, to a business entity needs to be paid by such business entity under RCM.
Held that— The contributions to National Mineral Exploration Trust (NMET) and District Mineral Foundation (DMF) qualify as consideration towards supply of mining service by Andhra Pradesh Government and they being includible under value of supply, are chargeable to GST under the Reverse Charge Mechanism in the hands of the applicant, i.e., service recipient.