RCM on Royalty Payment to Government

[NARENDER YARRAGORLA]

We are paying Royalty to State government, whether RCM u/s 9(3) applicable on the payment?

AI Summary

Debate on GST Reverse Charge for State Royalty Payments Under Section 9(3); Pay Under Protest Pending Court Decision. A query was raised about whether the Reverse Charge Mechanism (RCM) under section 9(3) of the GST applies to royalty payments made to the state government. The consensus among respondents is that GST is currently payable on such royalties under RCM. However, the matter is pending before the Supreme Court to determine if royalty constitutes a tax. Until a decision is made, it is advised to pay GST under protest to preserve the right to claim a refund if the court rules in favor of the taxpayers. The concept of paying 'under protest' is supported by Section 174 of the CGST Act.