Statutory mining-fund contributions form part of consideration and taxable value for Government supply, with GST payable under reverse charge.

Statutorily mandated contributions to the National Mineral Exploration Trust and the District Mineral Foundation, when linked to the grant and continuance of a mining licence, are treated as part of the consideration for the Government's supply of mining and leasing rights. The amounts are not viewed as separate levies disconnected from the supply; they form part of the value of supply because taxes, duties, cesses, fees and charges levied under other laws and charged separately are includible in GST valuation. As a result, the mining service is treated as a single Government supply and GST is payable by the mining lease holder under reverse charge.

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Issues: Whether the contributions made to the National Mineral Exploration Trust and the District Mineral Foundation under the mining legislation qualify as consideration for the supply of mining services by the State Government and, if so, whether such amounts form part of the value of supply chargeable to GST under reverse charge in the hands of the mining lease holder.

Analysis: The contributions to the two funds were held to arise from the statutory scheme governing mining rights and to be payable only because the applicant was granted the licence to extract mineral ore. The amounts were treated as part of the overall consideration for the single service of granting mining and leasing rights, and not as separate or independent levies disconnected from the supply. The reasoning also treated the compulsory contributions as includible in the value of supply under the GST valuation provisions, since taxes, duties, cesses, fees and charges levied under other laws and charged separately are includible in the value of supply. On that basis, the service was regarded as one supply provided by the Government, with the recipient business entity liable under reverse charge.

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

Ratio Decidendi: Statutorily mandated payments linked to the grant and continuance of a mining licence can form part of the consideration and taxable value of the single supply of mining rights, and GST on such Government supply is payable by the business recipient under reverse charge.

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