Service tax under reverse charge applies to royalty paid by a...

Service tax under reverse charge applies to royalty paid by a mining lessee for the right to use natural resources after 1 April 2016, when Government services to business entities were removed from the negative list. The text treats royalty as contractual consideration for mineral rights rather than a tax. It explains that the small service provider threshold exemption is unavailable where tax is payable by the service recipient under reverse charge. It further addresses extended limitation and penalties, stating that failure to register, pay tax and file returns despite contemporaneous departmental clarification may constitute deliberate suppression with intent to evade tax, supporting the extended period, interest and penalties for suppression, non-registration and non-filing.

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