STAY ORDER ON ROYALTY ON MINING LEASE.

[Sadanand Bulbule]

The Hon’ble Supreme Courts judgement dated 25/07/2024 in the case of Mineral Area Development Authority Vs. Steel Authority of India Ltd. - 2024 (7) TMI 1390 - Supreme Court (LB), it is held that 'Royalty' is not a tax-Royalty is a contractual consideration paid by the mining lessee to the lessor for enjoyment of of mining rights and the liability to pay royalty arises out of the contractual obligations of the mining lease.

However on 04/10/2021 vide Wirt Petition (Civil) No. 1076/2021, the Hon’ble Supreme Court of India in the matter of M/s. Lakhwinder Singh Vs. Union of India & Ors - 2021 (11) TMI 336 - SC Order had issued stay order on payment of GST for grant of mining lease/royalty by the petitioner. This petition was tagged with SLP(C) No. 3726 of 2017-Udaipur Chambers of Commerce and Industry Vs. Union of India - 2021 (2) TMI 1219 - SC Order.

This being the earlier position, can experts help update the present status of 'stay order' issued on 04/10/2021? And what is the impact MADA judgement[supra] on the stay order, if not vacated?

AI Summary

Mining lease royalty GST stay order remains active for specific petitioners only, not nationwide application A forum discussion addressed the current status of a Supreme Court stay order from October 2021 regarding GST on mining lease royalty payments. The initial query referenced the July 2024 MADA judgment clarifying that royalty is contractual consideration, not tax, and sought clarification on how this affects the existing stay order. A legal expert confirmed the stay order remains active as of April 2025 but clarified it applies only in-personam to specific petitioners, not all mining lease holders nationwide. The expert explained that since the stay is limited to particular parties, it does not impact the broader application of the MADA judgment for other mining operations across the country.