Classification & GST Rate for GMVN Mineral Rights Services: Service Code 9973 37, 18% GST

The case involved determining the classification and GST rate for services provided by Garhwal Mandal Vikas Nigam (GMVN) related to the right to use minerals. The court classified the service under Service Code 9973 37 as "Licensing services for the right to use minerals including its exploration and evaluation." The GST rate for these services was set at 18% (9% CGST + 9% SGST) based on the residual entry of Notification No. 11/2017-Central Tax (Rate). Previous rulings from Haryana and Chhattisgarh were considered but deemed irrelevant due to subsequent amendments.

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Issues Involved:
1. Classification of service provided by Garhwal Mandal Vikas Nigam (GMVN) to the applicant.
2. Whether the service is classified under Service Code (Tariff) 9973, specifically under 9973 37.
3. Rate of GST on the given services provided by the State of Uttarakhand or GMVN to the applicant for which royalty is being paid.

Detailed Analysis:
Issue 1: Classification of Service Provided by GMVN
The applicant sought an advance ruling on the classification of the service provided by GMVN. The service involves the right to use minerals, including exploration and evaluation. According to Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, the relevant classification falls under Service Code (Tariff) 9973 37 as "Licensing services for the right to use minerals including its exploration and evaluation."

Issue 2: Whether the Service is Classified Under Service Code (Tariff) 9973, Specifically Under 9973 37
The service provided by GMVN is indeed classified under Service Code (Tariff) 9973 37, as it pertains to licensing services for the right to use minerals, including exploration and evaluation. This classification is supported by the table in Notification No. 11/2017-Central Tax (Rate), which lists "Licensing services for the right to use minerals including its exploration and evaluation" under Serial No. 257.

Issue 3: Rate of GST on the Given Services
The rate of GST applicable to the services provided by GMVN was determined to be 18% [9% CGST + 9% SGST]. This conclusion was based on the residual entry (viii) of Serial No. 17 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, which covers "Leasing or rental services, with or without operator," other than the specific entries listed from (i) to (vii). The services in question do not fall under any of the specific entries (i) to (vii) and thus default to the residual entry, attracting an 18% GST rate.

Consideration of Other Advance Rulings
The applicant referenced advance rulings from Haryana and Chhattisgarh to support their contention for a lower GST rate. However, these rulings were based on provisions that were relevant during their respective periods. The ruling from Haryana, dated 29-6-2018, initially held that the service should attract GST at the same rate as the extracted minerals (5%). However, this ruling was rendered irrelevant due to amendments in Notification No. 11/2017-Central Tax (Rate) on 31-12-2018. The Rajasthan Advance Ruling Authority, in a similar case, held that the service falls under the residual entry (viii) of Serial No. 17, attracting an 18% GST rate.

Conclusion
1. The services rendered by GMVN are covered under Serial No. 257 of Annexure appended to Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, as "Licensing services for the right to use minerals including its exploration and evaluation."
2. The service is classified under Service Code (Tariff) 9973 37.
3. The rate of GST on the services provided by GMVN to the applicant, for which royalty is being paid, is 18% [9% CGST + 9% SGST].

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