RCM LIABILITY ON ROYALTY CHARGED / PAID TO MINES OWNER

[Shailander Jain]

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

AI Summary

Reverse Charge Mechanism on royalty: traders bear no RCM liability; royalty treated as part of transaction value.
Traders who reimburse royalty collected by contractors are not treated as recipients of the leasing-of-natural-resources service; the RCM obligation is attributed to the mining leaseholder/contractor, while the reimbursed royalty forms part of the trader's transaction value and must be included in taxable turnover.