The service received from the Government of Gujarat, whereby the recipient is required to pay Royalty to the Government of Gujarat by calculating an amount per Metric Ton of ‘Black Trap’ mined or a fixed amount per year, whichever is higher, is classifiable under Service Code 999113 as “Public administrative services related to the more efficient operation of business”.
Appellate Authority for Advance Ruling —– Royalty – The appellant sought an advance ruling as to what is the classification and rate of service provided in accordance with Notification No. 11/2017-CT (Rate) dated 28.06.2017, in terms of agreement by the State Government, for which royalty is being paid; whether said service can be classified under Tariff Heading 9973, specifically under 997337 as Licensing services for the right to use minerals including its exploration and evaluation or as any other service; whether services provided by the State Government is governed by applicability of Notification No. 13/2017-CT(Rate), dated 28.06.2017 under entry number 5 and whether applicant is taxable person in this case to discharge GST under RCM or whether given service is covered by exclusion clause number (1) of entry no 5 and State Government is liable to discharge GST on same. The AAR held that the activity undertaken by the applicant is classifiable under Heading 9973 (Leasing or 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) sub-heading 997337 of Notification Number 11/2017-C.T. (Rate), dated 28-6-2017. The same attracts 18% GST. The applicant is not covered under exclusion clause 1 of Sr. No. 5 of the Notification. Therefore, applicant is liable to discharge tax liability under reverse charge mechanism vide Notification No. 13/2017-C.T. (Rate), dated 28-6-2017. Being aggrieved by the aforesaid ruling, the appellant has filed the present appeal.
Held that:- The Hon’ble Appellate Authority for Advance Ruling held that the service received by the appellant from the State Government, is classifiable under Service Code 999113 as “Public administrative services related to the more efficient operation of business” and is chargeable to 18% GST as per Sl. No. 29 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended. The appellant is required to pay GST as per Sl. No. 5 of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017 on the aforesaid service received by the appellant from the Government of Gujarat, whereby the appellant is required to pay Royalty to the Government of Gujarat.
The service received from the Government of Gujarat, whereby the recipient is required to pay Royalty to the Government of Gujarat by calculating an amount per Metric Ton of ‘Black Trap’ mined or a fixed amount per year, whichever is higher, is classifiable under Service Code 999113 as “Public administrative services related to the more efficient operation of business”.
Appellate Authority for Advance Ruling —– Royalty – The appellant sought an advance ruling as to what is the classification and rate of service provided in accordance with Notification No. 11/2017-CT (Rate) dated 28.06.2017, in terms of agreement by the State Government, for which royalty is being paid; whether said service can be classified under Tariff Heading 9973, specifically under 997337 as Licensing services for the right to use minerals including its exploration and evaluation or as any other service; whether services provided by the State Government is governed by applicability of Notification No. 13/2017-CT(Rate), dated 28.06.2017 under entry number 5 and whether applicant is taxable person in this case to discharge GST under RCM or whether given service is covered by exclusion clause number (1) of entry no 5 and State Government is liable to discharge GST on same. The AAR held that the activity undertaken by the applicant is classifiable under Heading 9973 (Leasing or 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) sub-heading 997337 of Notification Number 11/2017-C.T. (Rate), dated 28-6-2017. The same attracts 18% GST. The applicant is not covered under exclusion clause 1 of Sr. No. 5 of the Notification. Therefore, applicant is liable to discharge tax liability under reverse charge mechanism vide Notification No. 13/2017-C.T. (Rate), dated 28-6-2017. Being aggrieved by the aforesaid ruling, the appellant has filed the present appeal.
Held that:- The Hon’ble Appellate Authority for Advance Ruling held that the service received by the appellant from the State Government, is classifiable under Service Code 999113 as “Public administrative services related to the more efficient operation of business” and is chargeable to 18% GST as per Sl. No. 29 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended. The appellant is required to pay GST as per Sl. No. 5 of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017 on the aforesaid service received by the appellant from the Government of Gujarat, whereby the appellant is required to pay Royalty to the Government of Gujarat.