DEAR SIR, GST TAX RATE ON ROYALTY IS APPLICABLE OR NOT (SAND,MINES)

Reply— As per entry No. 5 of Notification No. 13/2017 (central tax rate) dated 28.06.2017, on services supplied by the central government, state government, union territory or local authority to a business entity, GST shall be paid by the business entity as a service recipient. Therefore, the contractor is required to pay GST on RCM basis on Royalty charges paid. 

Till 31.12.2018 the rate of GST on the impugned services was applicable at the rate of tax as applicable to like goods involving the transfer of title of goods i.e. 5% in the case of iron ore, the goods supplied by the applicant, and the rate of GST stands increased to 18% (CGST 9% + SGST 9% ) from 01.01.2019 onwards. Refer notification no.27/2018-Central Tax (Rate) Dated: 31st December 2018.