Royalty payment and GST

[Nishtha Jain]

We have a party that pays royalty directly to the government ON BEHALF of the license holder. Can this be done? And should the RCM be paid by such party only or the license holder? Please guide on the same.

AI Summary

Can a Third Party Pay GST for a Mining Lease Holder? Exploring Reverse Charge Mechanism and Compliance Issues A discussion on a forum addresses the issue of whether a party can pay royalty on behalf of a mining lease holder and the implications for Goods and Services Tax (GST) under the Reverse Charge Mechanism (RCM). It is clarified that the mining lease holder is responsible for paying GST under RCM, and any payment by another party, even as a 'pure agent,' may lead to non-compliance and potential legal issues. The conversation highlights the importance of adhering to proper procedures and contractual agreements to avoid unnecessary litigation and tax liabilities. The discussion concludes with concerns about the lack of remedies for past actions and the potential consequences of non-compliance.