Compulsory mining contributions as consideration and supply, with GST payable under reverse charge on notified services.

Compulsory statutory contributions to the District Mineral Foundation and National Mineral Exploration Trust were treated as arising from mining operations and not as voluntary donations. The authority reasoned that the payments constituted consideration for an act of forbearance, namely tolerance of mining activity and its environmental impact, so they fell within the statutory concept of supply and consideration in the course or furtherance of business. It further applied the notified reverse charge entry for services involving Government-related bodies to a business entity and rejected the challenge to its inapplicability. The contributions were therefore considered liable to GST under reverse charge.

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Issues: (i) Whether contributions made to District Mineral Foundation and National Mineral Exploration Trust under the mining law constitute a taxable supply for consideration in the course or furtherance of business; (ii) whether those contributions are liable to GST under reverse charge.

Issue (i): Whether contributions made to District Mineral Foundation and National Mineral Exploration Trust under the mining law constitute a taxable supply for consideration in the course or furtherance of business

Analysis: The contribution was treated as a compulsory payment linked to mining operations and not as a voluntary donation. It was held to arise from the mining business and to be part of the commercial incidents of extraction activities. The payment was further treated as consideration for an act of forbearance, namely, the obligation to tolerate the mining activity and its associated environmental impact, bringing the transaction within the statutory meaning of supply and consideration.

Conclusion: The contributions were held to be in the course or furtherance of business and to amount to taxable supply for consideration.

Issue (ii): Whether those contributions are liable to GST under reverse charge

Analysis: The trusts were treated as bodies falling within the relevant reverse charge framework because the services were regarded as supplied to a business entity in the circumstances covered by the notified reverse charge entry. The notification governing reverse charge on services by Government, State Government, Union territory, or local authority to a business entity was applied, and the appellant's challenge to non-applicability of reverse charge was rejected.

Conclusion: The contributions were held liable to GST under reverse charge mechanism.

Final Conclusion: The appellate authority upheld the advance ruling and confirmed the GST liability on the contributions made to DMF and NMET.

Ratio Decidendi: A compulsory statutory payment connected with business operations can constitute taxable supply where it is made for consideration in the form of an act of forbearance, and such liability may be taxed under reverse charge when the relevant notified conditions are satisfied.

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