TaxTMI 
TaxTMI 
2026 (9) TMI 1732
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....ection 103(1) of the CGST Act, 2017 and the RGST Act, 2017, this Advance Ruling pronounced under Chapter XVII of the Acts shall be binding only: (a) on the applicant who had sought it in respect of any matter referred to in Section 97(2) of the Acts; and (b) on the concerned officer or the jurisdictional officer in respect of the applicant. 3. In terms of Section 103(2) of the CGST Act, 2017 and the RGST Act, 2017, this Advance Ruling shall be binding unless the law, facts or circumstances supporting the original ruling have changed. 4. Under Section 104(1) of the CGST Act, 2017 and the RGST Act, 2017, where the Authority finds that the Advance Ruling has been obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the provisions of the Acts or the Rules made thereunder shall apply to the applicant as if such Advance Ruling had never been made. 5. Any appeal against this Advance Ruling shall lie before the Appellate Authority for Advance Ruling, Rajasthan, in terms of Section 100 of the CGST Act, 2017 and the RGST Act, 2017. Such appeal ....
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....ining rights/service, will be liable to discharge GST on the royalty paid to the State Government under the Reverse Charge Mechanism in terms of the relevant provisions of the CGST Act and applicable notifications issued thereunder. 6. That the Applicant, being desirous of complying with its statutory obligations in a correct and timely manner, is constrained to approach this Hon'ble Authority for Advance Ruling under Section 97 of the CGST Act, 2017 read with Rule 104 of the CGST Rules, 2017. B. INTERPRETATION AND UNDERSTANDING OF APPLICANT ON QUESTION RAISED (IN BRIEF) (a) Mines And Minerals (Development and Regulation) Act 1957: (i) The MMDR Act is the principal Central legislation governing the regulation and development of mines and minerals in India. Section 9 mandates that a mining lease holder shall pay royalty at rates specified in the Second Schedule. The Central Government has the power to revise such rates. (ii) Section 15 of the MMDR Act empowers State Governments to make rules in respect of minor minerals (defined under Section 3(e) to include ordinary sand, gravel, quartzite, murrum, kankar, etc.). Minor minerals fall within the regul....
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....e Government to a permit/lease holder for consideration (royalty) constitutes a 'service' classifiable under SAC 997337 - Licensing Services for the Right to Use Minerals, including its Exploration and Evaluation (under Group 99733, Heading 9973). (ii) That the royalty payable by the Applicant to the State Government of Rajasthan under the Short-Term Permit is in the nature of consideration for the grant/enjoyment of mining rights and not merely a payment for the extracted minerals. Accordingly, the said royalty constitutes consideration for a taxable supply of service under the GST law, and GST is liable to be discharged thereon under the reverse charge mechanism, as applicable to services supplied by the State Government. (iii) Since the Government, being the service provider in respect of the aforesaid grant of mining rights, falls within the specified category of services notified under Section 9(3) of the CGST Act, 2017, the liability to discharge GST on such service stands shifted to the recipient, namely M/s Pink City Developers, under the Reverse Charge Mechanism. (iv) Hence it is the understanding of the Applicant that the activity undertaken by ....
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....ircular No. 164/20/2021-GST 06.10.2021 DEFINITIVE CLARIFICATION, 18% GST on mining/mineral exploration rights under SAC 997337, applicable for the entire GST period from 01.07.2017-GST for period 01.07.2017 to 31.12.2018 regularised on 'as is where is' basis, meaning where 18% was paid, it is accepted; where a different rate was applied, it is regularised without demanding the difference. Rajasthan GST Notfn. (RGST) equivalent of Notfn. 13/2017 28.06.2017 State RCM notification, SGST/RGST of 9% payable by Applicant on royalty under RCM for intra-State supply D. RELEVANT CASELAW AND ADVANCE RULINGS: "Mineral Area Development Authority v. Steel Authority of India - 2024 (8) TMI 956 - Supreme Court (LB)" The Supreme Court held that royalty payable under a mining lease is not a tax, but is consideration paid by the lessee to the lessor for the grant and enjoyment of mineral rights; the Court further recognized that a mining lease confers a right to enjoy immovable property, namely the mineral-bearing land, and therefore royalty partakes the character of contractual consideration for such right. The Applicant, M/s Pink City Developers, theref....
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.... minerals or mineral resources', taxable under SAC 997337, and liable to GST under the Reverse Charge Mechanism? Q2) Whether the GST position applicable to a Quarry Lease or Mining Lease holder under the RMMCR, 2017 and the MMDR Act, 1957, in relation to payment of GST on royalty under RCM, also applies to M/s Pink City Developers as a Short-Term Permit holder? F. COMMENTS OF THE JURISDICTIONAL OFFICER:- Comments received from the Office of Deputy Commissioner, State Tax, Circle-N, ZONE-JAIPUR-3rd, Divisional Kar Bhawan, Jhalana Dungri, JAIPUR, Rajasthan vide letter Sr.No. 108, Dated 09.06.2026 are as under:- The applicant M/s Pink City Developers intend to obtain a Short-Term Permit in terms of Rule 51 of the Rajasthan Minor Mineral Concession Rules, 2017 (RMMCR, 2017) read with the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). Two questions have been raised for advance ruling: (i): Whether the royalty paid / payable by the Applicant, M/s Pinkcity Developers, being a short term permit (STP) holder in a mining area in the State of Rajasthan, to the State Government of Rajasthan, constitute consideration for a 'service' by way of gr....
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.... to the applicant on 13.07.2026. Mr. Ranjan Mehta Advo., Neha Sethi Advo., Vaidik Sharma Advo. Authorized Representative appeared for personal hearing. They reiterated the submission already made by them. H. DISCUSSIONS AND FINDINGS 1. At the outset, we would like to make it clear that the provisions of both the CGST Act and the RGST 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 provision under the RGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / RGST Act would be mentioned as being under the "GST Act". 2. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made both oral and written during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant's submission/views in respect of question on which the advance ruling is sought. 3. We found that under Section 7(1) of the CGST Act, 2017, 'supply' includes a....
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.... lease is contractual consideration paid by the lessee to the lessor for the grant and enjoyment of mineral rights, and not a tax. The Authority notes the applicant's submission that certain questions concerning the leviability of GST on mining royalty consequent to the Supreme Court judgment remain the subject of pending litigation. This Authority proceeds to rule on the basis of the statutory and notification framework as it stands as on the date of this ruling, without prejudice to the outcome of any such pending proceedings, consistent with the approach taken in this Authority's ruling in M/s Vinayak Stone Crusher (RAJ/AAR/2019-20/08 dated 17/20.05.2019), where an identical position was taken in respect of a Quarry Lease holder. In light of paragraphs 3 to 5 above, the royalty paid or payable by the applicant to the State Government of Rajasthan constitutes consideration for a 'service' by way of grant of right to use minerals/mineral resources, classifiable under SAC 997337, and is liable to Goods and Services Tax at 18% (9% CGST + 9% SGST) under the Reverse Charge Mechanism, to be discharged by the applicant as recipient. 7. In respect of applicant's specific status as a S....