GST Classification Dispute: Royalty Services Rate

The case involved M/s. Robo Silicon Pvt Ltd seeking clarification on the classification of services and applicable GST rate for Royalty paid to the Government of Andhra Pradesh. The applicant argued for classification under SAC 9973 with a 5% GST rate. Citing a precedent, the applicant later withdrew the application due to a change in the CGST rate. The Authority disposed of the case without further examination following the withdrawal, emphasizing the impact of legislative amendments on tax implications.

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Issues:
Classification of services received by M/s. Robo Silicon Pvt Ltd for which Royalty is paid and the applicable GST rate.

Analysis:
1. Facts of the Case: M/s. Robo Silicon Pvt Ltd is engaged in manufacturing sand and construction materials after obtaining mining rights from the Government of Andhra Pradesh. The applicant pays Royalty to the government and GST under reverse charge.

2. Questions Raised: The applicant sought clarification on the classification of services and the applicable GST rate for the Royalty paid.

3. Applicant's Interpretation: The applicant argued that the services should be classified under SAC 9973 and GST should be levied at 5% based on Notification No. 11/2017-Central Tax (Rate).

4. Legal Provisions: The applicant referred to Notification No. 11/2017-Central Tax (Rate) for the classification of services under SAC 9973. They also highlighted the applicable rate of GST for different categories of goods under Notification No. 01/2017-Central Tax (Rate).

5. Precedent: The applicant cited a ruling by the Haryana Authority for Advance Ruling, which classified similar services under group 99733 and applied GST at 5% under Reverse Charge Mechanism.

6. Discussion and Findings: The applicant later withdrew their application citing a change in CGST rate to 9% from 1st January 2019, as per Notification 27/2018-Central Tax (Rate). The Authority accepted the withdrawal without delving into the merits of the case.

7. Ruling: As the applicant withdrew the application, the Authority disposed of the case without further examination.

This judgment clarifies the classification of services received by M/s. Robo Silicon Pvt Ltd and the applicable GST rate in the context of paying Royalty to the Government of Andhra Pradesh. The withdrawal of the application based on a change in CGST rate demonstrates the impact of legislative amendments on tax implications.

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