GST on Royaty paid to Govt

[Ravikumar Doddi]

Dear sir,

Whether GST is payable or not on royalty paid to Govt by Mining companies, at what rate if it is exempted PL give the notification or circular and SAC code.

[KASTURI SETHI]

As per FAQ dated 31.7.17 (Q.No.22) GST is payable on royalty paid to Govt. under RCM.

Question 22 : Whether GST is payable on royalty (to be paid to Government) for Mining Lease granted by State Govt.

Answer : Yes, on royalty GST will apply under reverse charge mechanism. Further, such payment of GST under reverse charge mechanism would be eligible as ITC in the hands of the recipient of supply for payment of

[DR.MARIAPPAN GOVINDARAJAN]

GST is payable by the Government on reverse charge mechanism.

[PAWAN KUMAR]

GST is payable under RCM similar at the rate of 18%. GST paid is also claimable as ITC.

[CASusheel Gupta]

GST is payable by mining companies under RCM

Refer to entry no. 5 of notification number 13/2017.

Thanks and Regards

CA Susheel Gupta

9811004443, 8510081001

AI Summary

Reverse charge on royalty: royalty payments to government attract GST and are eligible for input tax credit.
GST on royalty paid by mining companies to the government is payable under the reverse charge mechanism, with the recipient required to discharge GST on such royalty; this position is reflected in an official FAQ (Q.22) and in the notification entry treating government royalty as taxable. GST paid under RCM on royalty is eligible as input tax credit for the recipient, subject to general ITC conditions.