Rate of GST on the royalty received by the State Government would be at the rate of 18%.
Classification of service— In the instant case, applicant is engaged in the business of sand mining and have been granted mining lease for extraction of sand at Basti District. The said product is classifiable under tariff heading 2505, leviable to GST @5%.
The applicant has sought an advance ruling on the following questions:-
i. What shall be the classification of service provided by the Government of Uttar Pradesh to M/s. Ajay kumar singh in accordance with the Notification No. 11/2017-CT (Rate) dated 28.06.2017 read with annexure thereof.
ii. Whether the said service can be classified under Chapter number 9973 as “Licensing services for the right to use minerals including its exploration and evolution” or any other service under the said chapter.
iii. What shall be the rate of GST on given services provided by the Government of Uttar Pradesh to M/s. Ajay kumar singh for which royalty is being paid.
Held that—
the impugned service received by the Applicant from the State Government merits classification under the head “Licensing services for the right to use minerals including its exploration and evaluation” at Serial No. 257, Heading 9973, Group 99733.
On a conjoint reading of the notification no. 27/2018-Central Tax (Rate) dated 31.12.2018, Minutes / Agenda / Proposal/ Discussion of the GST council, we are of the view that amendments have been carried out vide the aforesaid notification to clarify the legislative intent as well as to resolve the unintended interpretations. It is well settled that the legislative intent cannot be defeated by adopting interpretations which is clearly against such interpretations. In view of this we are of the opinion that the service received by the applicant from State Government is liable to be taxed @ 18%.
Rate of GST on the royalty received by the State Government would be at the rate of 18%.
Classification of service— In the instant case, applicant is engaged in the business of sand mining and have been granted mining lease for extraction of sand at Basti District. The said product is classifiable under tariff heading 2505, leviable to GST @5%.
The applicant has sought an advance ruling on the following questions:-
i. What shall be the classification of service provided by the Government of Uttar Pradesh to M/s. Ajay kumar singh in accordance with the Notification No. 11/2017-CT (Rate) dated 28.06.2017 read with annexure thereof.
ii. Whether the said service can be classified under Chapter number 9973 as “Licensing services for the right to use minerals including its exploration and evolution” or any other service under the said chapter.
iii. What shall be the rate of GST on given services provided by the Government of Uttar Pradesh to M/s. Ajay kumar singh for which royalty is being paid.
Held that—
the impugned service received by the Applicant from the State Government merits classification under the head “Licensing services for the right to use minerals including its exploration and evaluation” at Serial No. 257, Heading 9973, Group 99733.
On a conjoint reading of the notification no. 27/2018-Central Tax (Rate) dated 31.12.2018, Minutes / Agenda / Proposal/ Discussion of the GST council, we are of the view that amendments have been carried out vide the aforesaid notification to clarify the legislative intent as well as to resolve the unintended interpretations. It is well settled that the legislative intent cannot be defeated by adopting interpretations which is clearly against such interpretations. In view of this we are of the opinion that the service received by the applicant from State Government is liable to be taxed @ 18%.