We are trading in Sand Stone and purchasing sand stone cobbles from Wholesale dealers. During movement of goods to our location, royalty has charged by Mining contractor from truck driver per tone basis which was paid by truck driver and afterward we reimbursed the same to truck driver. We have disclosed the said royalty payment in book of account as Royalty Expenses. Now during audit department is asking to pay GST under RCM on said Royalty Expenses. As we are not mines owner ,, we are only traders of sand stone .Is we are liable for payment of RCM.
Plz guide
Traders Not Liable for GST Under RCM on Royalty Paid to Mining Contractors, Pending Court Decision A discussion on a forum regarding the applicability of Goods and Services Tax (GST) under the Reverse Charge Mechanism (RCM) on royalty expenses paid by a trader to a mining contractor. The trader, who deals in sandstone, reimburses royalty charges paid by truck drivers to the mining contractor. The consensus among forum participants is that the trader is not liable to pay GST under RCM, as the responsibility lies with the mining leaseholder. The royalty charges are considered part of the transaction value, not a separate liability for the trader. The issue of tax on royalty is pending before the highest court. (AI Summary)
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