GST on royalty in mining sector

[Sudhir Kumar]

Whether the GST is applicable on royalty paid to the state government to obtain the right to mining?

[Himansu Sekhar]

yes sir and is mentioned in the FAQ released by CBIC

[Shilpi Jain]

This issue is pending before the SC.

AI Summary

GST on mining royalty treated as taxable supply under administrative guidance, while ultimate judicial determination remains pending. Whether GST applies to royalty paid to a state government for mining rights depends on characterising the royalty as a taxable supply; a central FAQ treats such royalty as subject to GST, but the classification is contested and the definitive legal position awaits judicial determination.