TaxTMI 
TaxTMI 
TaxTMI 
2020 (8) TMI 908
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.... provisions under the MPGST Act and vice-versa. At places we may refer it as GST Act. The present appeal has been filed under section 100 of the Central Goods and Service Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017 [hereinafter also referred to as "the CGST Act and MPGST Act"] by M/s. NMDC Limited (hereinafter also referred to as the "appellant") against the order of Authority for Advance Ruling No. 09/2019 dated 18.07.2019 BRIEF FACTS OF THE CASE 1. NMDC limited is a state-controlled mineral producer of the Government of India. It is owned by the Government of India and is under administrative control of the Ministry of Steel. 2. It is iron ore producer and exporter producing about 30 million tons of iron ore f....
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.... that the said service shall be classified under Tariff Heading 99733. 2. In respect of the second question raised by the Applicant regarding the taxability or otherwise of the additional contributions made to DMF and NMET, we rule that the said contributions are nothing but additions to the royalty payable for the original supply itself, and is therefore liable to be added to the value of the original supply and treated accordingly for the purposes of GST. QUESTIONS RAISED BEFORE THE APPELLATE AUTHORITY FOR ADVANCE RULING (AAAR) The following question has been posed before the Appellate Authority with reference to the activity undertaken by the Appellant: - Appellant's liability to pay tax on contributions made to District Mineral....
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.... 3. Appellant has come before us against the ruling of AAR for question number 2. 4. Appellant has taken several grounds without prejudice to each other. Their first ground is that contributions made by them to DMF and NMET are not against any taxable supply made by these bodies, hence, no GST should be applicable to these contributions. Appellant has argued by quoting definition of supply and citing paragraph 5 (e) of schedule II which defines "agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act" as services that there must be a service provider and a service recipient. 5. These arguments can be stated in short as a. There is no activity/supply of services undertaken by DMF and NM....
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....nothing but royalty itself, since these contributions are described as being "in addition to" the payment of royalty, which itself is "in respect of the mining rights. As such, therefore, such amounts are paid in respect of mining rights and the said supply is already deemed to be taxable under reverse charge basis." 8. Appellant is required to explain and contest the finding of AAR but we find no such contest in the write up. He could have further argued in this regard but did not avail of the benefit of personal hearing or hearing through virtual hearing. 9. Further for the sake of understanding we note "charging sections of MMDR Act as under: - 9. Royalties in respect of mining leases.- (1) The holder of a mining lease granted befo....
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....er, employee, contractor or sub-lessee from the leased area, he shall be liable to pay either such royalty, or the dead rent in respect of that area, whichever is greater. (2) The Central Government - - 3 (9 B. District Mineral Foundation.- (1) In any district affected by mining related operations, the State Government shall, by notification, establish a trust, as a non-profit body, to be called the District Mineral Foundation. (2) The object of the District Mineral Foundation shall be to work for the interest and benefit of persons, and areas affected by mining related operations in such manner as may be prescribed by the State Government. (3) The - - - . (4) The State Government - - - . (5) The holder of a mining lease or a ....
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....licence-cum-mining lease shall pay to the Trust, a sum equivalent to two per cent. of the royalty paid in terms of the Second Schedule, in such manner as may be prescribed by the Central Government.] 10. Thus, it is noted that a mining lease holder or prospecting license cum mining lease is required to pay royalty, dead rent (when it is more than royalty), money to DMF and NMET under the MMDR Act. These leases are granted to the person under the Act and he has to make payment of all the requisite amounts. lie has no choice to make payment of one or more but has to pay all the dues as per Act. The Act has bifurcated the heads for its own convenience, but the person is discharge all the liabilities. 11. AAR in its order has already held tha....