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Issues: Whether the amounts paid towards the District Mineral Foundation and the National Mineral Exploration Trust, being statutory contributions linked to mining royalty, are liable to GST under reverse charge as services supplied by the Government.
Analysis: The lease of Government land for mining was treated as a supply of service. The statutory contributions to the District Mineral Foundation and the National Mineral Exploration Trust were held to be payments made in addition to royalty and computed with reference to royalty under the mining law. Since these amounts formed part of the taxable value of the service, and the supplier was the Government with the applicant as a business entity recipient, the reverse charge notification covering services supplied by the Government applied.
Conclusion: The contributions to the District Mineral Foundation and the National Mineral Exploration Trust are liable to GST under reverse charge.
Final Conclusion: Statutory mining-related contributions paid to Government-created funds were held taxable as part of the consideration for the underlying lease service, bringing them within the reverse charge framework.
Ratio Decidendi: Where statutory payments are intrinsically linked to a taxable Government service and form part of its value, GST liability arises on reverse charge when the recipient is a business entity and the service falls within the notified category.
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