Mining rights consideration includes NMET and DMF contributions, making them part of GST value under reverse charge.

Contributions to the National Mineral Exploration Trust and the District Mineral Foundation were treated as compulsory payments arising from the statutory mining framework and linked to the grant of mining rights. The mining licence and the right to extract mineral ore were treated as a single Government supply, with royalty, NMET contribution and DMF contribution forming the consideration structure; as a result, the contributions were includible in the value of supply under GST valuation rules and GST was payable under reverse charge.

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Issues: Whether contributions to the National Mineral Exploration Trust and the District Mineral Foundation qualify as consideration for supply of mining service by the State Government and, if so, whether they form part of the value of supply chargeable to GST under reverse charge.

Analysis: The contributions were held to arise from the statutory framework governing mineral development and were treated as compulsory payments linked to the grant of mining rights. The reasoning proceeded on the basis that the mining licence and the right to extract mineral ore constituted a single supply by the Government, with royalty, NMET contribution and DMF contribution forming the consideration structure for that supply. Since the payments were chargeable in relation to a supply made by the Government to a business entity, they were regarded as includible in the value of supply under the GST valuation provisions, and the reverse charge notification applied.

Conclusion: The contributions to NMET and DMF were held to be consideration for the mining service and were held includible in the value of supply, making GST payable under reverse charge in the hands of the applicant.

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