Works contract classification depends on transfer of property in goods; consumable inputs not conveyed exclude concessional GST treatment.
Classification as a works contract depends on whether the execution involves a transfer of property in goods. Consumable inputs used and consumed by the contractor that are not conveyed to the contractee do not constitute such transfer; therefore where materials like oil, HSD, blasting material and spare parts are consumed and ownership is not passed, the contract does not qualify as a works contract and concessional government works rates are not available. (AI Summary)

Royalty as tax: GST should not apply as tax-on-tax, or if applied, be treated as supply of goods.
Royalty for mining leases is characterised as a tax charged for use of land and the economic value of minerals, implying GST on royalty would be tax-on-tax. If GST applies, royalty should be treated as supply of goods because it is a charge linked to the ore or mineral extracted and removed; statutory provisions requiring royalty on minerals removed support treating the levy as a charge on goods rather than a service. (AI Summary)