Mining Operations Not Exempt From GST Registration Despite Royalty Payments, Subject to Supreme Court's Final Decision HC disposed of writ petitions challenging GST registration requirements for mining operations. Petitioners argued they were exempt as they already paid ...
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Mining Operations Not Exempt From GST Registration Despite Royalty Payments, Subject to Supreme Court's Final Decision
HC disposed of writ petitions challenging GST registration requirements for mining operations. Petitioners argued they were exempt as they already paid royalty/seignorage charges and cited a SC stay order on GST for mining leases. Respondents acknowledged the SC stay and a circular clarifying that 18% GST applies to mineral exploration and mining rights from 01.01.2019. The court directed authorities to review petitioners' representations in accordance with the SC judgment without imposing costs.
Issues: Petitioners seeking to restrain respondents from insisting on GST Act 2017 registration.
Analysis: The petitioners filed Writ Petitions to prevent the respondents from compelling them to register under the GST Act 2017. The issue in both petitions being the same, they were heard together. One petitioner sent a representation to state officials, asserting that they were already paying royalty/seignorage charges, which they believed exempted them from GST. The petitioner also cited a Supreme Court judgment staying GST payment for mining lease/royalty. The petitioner argued that authorities should not demand documents or impose GST. Reference was made to High Court decisions supporting this stance.
The Government Advocate for respondents mentioned previous doubts regarding GST on minerals and a subsequent circular clarifying the applicable rate. The circular specified that from 01.01.2019, GST at 18% applied to granting mineral exploration and mining rights. It was clarified that the "same rate of tax" provision did not extend to grant of mining rights. The circular also highlighted that no GST had been demanded or collected from mineral quarry owners. The Government acknowledged the Supreme Court's stay order and assured consideration of the petitioners' requests based on the apex court's judgment.
In light of the submissions, the Court directed the respondents to review the petitioners' representations and dispose of them in line with the Supreme Court's judgment. The Court emphasized adherence to the apex court's decision in handling the petitioners' requests. Consequently, the Writ Petitions were disposed of without costs, and connected Miscellaneous Petitions were closed.
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