Compulsory mining-law contributions form part of GST value for government mining services and attract reverse charge treatment.

Compulsory payments towards the National Mineral Exploration Trust and District Mineral Foundation, made under the mining law, were treated as part of the consideration for the Government's mining service because they arose from the statutory framework governing the grant and continuance of the mining licence. The licensing activity was viewed as a single supply, and the royalty-linked trust and foundation contributions were included in the taxable value of that supply under GST. Their linkage to royalty did not change their character for valuation purposes, and the Government service to a business entity was liable to GST under reverse charge.

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Issues: Whether the contributions to National Mineral Exploration Trust and District Mineral Foundation under the mining law qualify as consideration for the supply of mining service by the State Government and are includible in the value of supply chargeable to GST under the reverse charge mechanism.

Analysis: The contributions were held to arise from the statutory framework governing mining rights and were linked to the grant and continuance of the mining licence. The licensing activity was treated as a single supply by the Government, and the amounts payable under the royalty, trust contribution and foundation contribution heads were considered part of the overall consideration for that supply. Since the payments were compulsory and connected with the supply of mining service, they fell within the value of supply under the GST law. The fact that the payments were measured with reference to royalty did not alter their character for GST valuation purposes. The relevant notification also placed services supplied by the Government to a business entity under reverse charge.

Conclusion: The contributions to National Mineral Exploration Trust and District Mineral Foundation are consideration for mining service supplied by the Andhra Pradesh Government, are includible in the value of supply, and are chargeable to GST under reverse charge in the hands of the applicant.

Ratio Decidendi: Statutory payments that are compulsory and integrally linked to the grant of a government mining licence can constitute consideration for the supply and form part of the taxable value under GST, attracting reverse charge where the notification so provides.

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