GST on mining service includes NMET and DMF contributions as consideration, making the mining lease holder liable under reverse charge.

Compulsory contributions to the National Mineral Exploration Trust and the District Mineral Foundation were treated as part of the consideration for the State Government's mining service, because they were linked to the grant and continuation of mining rights under the mining regime. The AAR held that their statutory character did not exclude them from GST valuation, as the amounts were payable in connection with the supply and fell within the rule including taxes, duties, cesses, fees and charges levied under other laws in the value of supply. GST was therefore payable under reverse charge by the mining lease holder on the full value of the mining service.

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Issues: Whether contributions to the National Mineral Exploration Trust and the District Mineral Foundation, made under the Mines and Minerals (Development and Regulation) Act, 1957 and the related Rules, constitute consideration for the supply of mining service by the State Government and form part of the value of supply chargeable to GST under reverse charge in the hands of the mining lease holder.

Analysis: The contributions were examined in the context of the GST definition of supply, the meaning of consideration, and the rules governing inclusion in the value of supply. The payments were treated as compulsory amounts linked to the grant and continuation of mining rights, with royalty, NMET contribution, and DMF contribution forming part of the same licensing arrangement. The statutory character of the levies did not exclude them from GST valuation because the amounts were payable in connection with the mining service and were covered by the value-inclusion rule for taxes, duties, cesses, fees, and charges levied under other laws. The applicable reverse charge notification covered services supplied by the State Government to a business entity.

Conclusion: The contributions to NMET and DMF were held to be consideration for the supply of mining service, includible in the value of supply, and liable to GST under reverse charge in the hands of the applicant.

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