AI Drafter 
TaxTMI 
TaxTMI 
2020 (9) TMI 589
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....of government on various terms and conditions as the agreement. 4. The applicant further submitted that in accordance of Part V para 3 of the agreement it has been agreed that the bid amount of Rs. 1,50,000/- shall become "Annual Deed Rent" as amount agreed to be paid by the lessee and the rate of same shall increase depending upon the terms of auction. Further, as per the provision of para 3 of the Part V of the agreement the lessee shall be liable to pay the deed rent or royalty whichever is higher in respect of the quarry as calculated as per the para 4 of the PART V of the agreement but not both. In compliance of the said lease agreement the applicant has paid annual deed rent or royalty as the case may be. Further, in accordance to the said lease deed the applicant is required to submit a monthly return in a specified format i.e. Form J, Form F1 and F2 online wherein it has been asked to submit the quantity of minerals produced and dispatched from the leased mines and other information. 5. The applicant further submitted that in terms of the said lease the applicant is required to pay in addition to the annual deed rent, amount to the extent of 10% as District Mineral Fu....
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..... We have considered the submissions made by the Applicant in their application for advance ruling. We also considered the issue involved, on which advance ruling is sought by the applicant, relevant facts & the applicant's interpretation of law. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the SGST Act. 13. The applicant is engaged in the business of mining activity on a plot of land leased from the government of Gujarat and exploring, drilling, processing etc., of products derived from such mines and stone quarry lands. The applicant is quarrying "BLACK TRAP". BLACKTRAP material attracts GST at 5% under Heading 2517 in Schedule-I. 14. The Applicant has entered into Quarrying lease/license agreement for "BLACKTRAP" material with the Government of Gujarat on various terms and conditions. As per the terms and condition of the lease applicant is required to pay bid amount of Rs. 1,50,000/- and this bid amount shall become ....
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....l services concerning machinery and equipment with or without operator Group 99732 Leasing or rental services concerning other goods Group 99733 Licensing services for the right to use intellectual property and similar products The service received by the applicant is not covered under Group 99731 or Group 99732. We, therefore, look at the services covered under Group 99733 or else by any other group. The Group 99733 consists of the following Headings Service Code (Tariff) Service Description 997331 Licensing services for the right to use computer software and databases 997332 Licensing services for the right to broadcast and show original films, sound recordings, radio and television programme and the like 997333 Licensing services for the right to reproduce original art works 997334 Licensing services for the right to reprint and copy manuscripts, books, journals and periodicals 997335 Licensing services for the right to use research and development products 997336 Licensing services for the right to use trademarks and franchises 997337 Licensing services for the right to use minerals including its exploration and ....
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....loration and evaluation' 19.1 Regarding the rate of tax applicable on the above supply Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 is referred and found that the entries related to SAC 9973 are as under : Sl. No. Chapter Section or Heading Description of Service Rate (per cent) Conditions 17 Heading 9973 (Leasing or rental services, with or without operator) (i) ........ (ii) ....... (iii) Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. Same rate of central tax as on supply of like goods involving transfer of title in goods - (iv) ....... (v) ........ (vi) Leasing or rental services, with or without operator, other than (i), (ii), (iii), (iv) and (v) above. Same rate of central tax as applicable on supply of like goods involving transfer of title in goods - 35 Heading 9997 Other services (washing, cleaning and dyeing serv....
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....ash, deferred payment or other valuable consideration. Same rate of central tax as on supply of like goods involving transfer of title in goods (iv) ...... (v) ...... (vi) Leasing of motor vehicles purchased or leased prior to 1st July, 2017 65 per cent of the rate of central tax as applicable on supply of like goods involving transfer of title in goods Note: Nothing contained in this entry shall apply on or after 1st July, 2020. - (vii) Leasing or rental services, with or without operator, other than (i), (ii), (iii), (iv), (v) and (vi) above. Same rate of central tax as applicable on supply of like goods involving transfer of title in goods - 35 Heading 9997 Other services (washing, cleaning and dyeing services; beauty and physical well-being services; and other miscellaneous services including services nowhere else classified). 9 - 19.3 Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, Serial No. 17 was further amended by Notification No. 1/2018-Central Tax (Rate), dated 25-1-2018 and entry No. ....
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....cified period) for cash, deferred payment or other valuable consideration. Same rate of central tax as on supply of like goods involving transfer of title in goods - (iv) ...... (v) ....... (vi) Leasing of motor vehicles purchased or leased prior to 1st July, 2017 65 per cent of the rate of central tax as applicable on supply of like goods involving transfer of title in goods Note : Nothing contained in this entry shall apply on or after 1st July, 2020. - (vii) Time charter of vessels for transport of goods 2.5 Provided that credit of input tax charged on goods (other than on ships, vessels including bulk carriers and tankers) has not been taken (please refer to Explanation No. (iv) (viia) Leasing or renting of goods Same rate of central tax as applicable on supply of like goods involving transfer of title in goods - (viii) Leasing or rental services, with or without operator, other than (i), (ii), (iii), (iv), (v), (vi), (vii) and (viia) above. 9 - 35 Heading 9997 ....
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.... use Intellectual Property and similar products other than IPR Existing Proposed Description of Services Rate (%) Description of Services Rate (%) Sl. 17 Heading 9973 (Leasing or rental servies with or without operator) (viii) Leasing or rental services, with or without operator other than (i), (ii), (iii), (iv), (v), (vi) and (vii) above. Same rate of Central Tax as on supply of like goods involving transfer of title in goods. (viia) Leasing or renting of goods. Same rate of Central Tax as on supply of like goods involving transfer of title in goods. (viii) Leasing or rental services, with or without operator other than (i), (ii), (iii), (iv), (v), (vi), (vii) and (viia) above. 18 Discussion : 1. Heading 9973 of scheme of classification of services under GST includes "Group 99733 : the licensing services for the right to use intellectual property and similar products". However, the rate notification No. 11/2017-C.T. (R), dated 28-6-2017, prescribes rate only for transfer or permitting the use or enjoyment of Intellectual Property Rights (IPR). No rate has been prescribed for transfer of intellectual property and similar products ....
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....thout operator, other than (i), (ii), (iii), (iv), (v), (vi), (vii) and (viia) above" with rate of tax as 18%. 20. The rate of GST applicable on lease of goods may have been prescribed as the rate of GST applicable to supply of like goods involving transfer of title over the goods but the rate of GST prescribed for lease of goods can't be made applicable for leasing of mining area conferring the right to extract and appropriate the minerals. The lease by Government not being a lease of any goods, the conditional rate of tax applicable to sale of like goods cannot be imported for prescribing the rate of GST applicable to leasing of mining area. Therefore, in view of the above discussion of GST Council it is clear that amendments have been carried out vide the aforesaid notification No. 27/2018- CT (Rate) Dated 31.12.2018 to clarify the legislative intent as well as to resolve the unintended interpretations. It is well settled that the legislative intent cannot be defeated by adopting interpretations which is clearly against such interpretations. 21. We rely on the decision of the Hon'ble Supreme Court of India in the case of W.P.I.L. Ltd. v. Commissioner of Central Excise, Mee....
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....nature of clarification of the GST rate in respect of "right to use Intellectual Property and similar products other than IPR", the applicability of said residual entry (viii) would be from the date of Not. No. 11/2017-(Rate) Central Tax as the same view is held by Hon'ble Supreme Court of India. Accordingly, impugned service 'Licensing services for the right to use minerals including its exploration and evaluation' which is classifiable under SAC 9973 37 will be covered under residual entry No. (viii) of the Notification No. 11/2017-(Rate) Central Tax dated 28.06.2017 and would attract GST rate 18% {9% CGST+9% SGST} from the period of July, 2017 onwards. 22. The applicant has referred to Advance Ruling in the case of M/s. Pioneer Partners reported in 2018 (18) GSTL 58 (AAR-GST), wherein the Haryana Authority for Advance Ruling held that "The services for the right to use minerals including its exploration and evaluation, as per Sr. No. 257 of the annexure appended to Notfn. No. 11/2017-C.T. (Rate), dated 28-6-2017 is included in Group 99733 under Heading 9973. Hence it attracts the same rate of tax as on supply of the like goods involving transfer of title in goods. The said Au....