GST to be paid on RCM basis on royalty paid to government : AAR

GST to be paid on RCM basis on royalty paid to government : AAR : Advance ruling by Haryana AAR In matter ofPioneer Partners Below is the Extract of Advance Ruling Advance ruling under section 98 of the CGST/HGST Act 2017 In the backdrop of above discussions and findings the advance ruling on the questions is pronounced as under :- 1. What is the classification of service provided in accordance with Notification No. 11/2017-CT (Rate) dated 28.06.2017 read with annexure attached to it, by the State of Haryana to M/s Pioneer Partners for which royalty is being paid Whether said service can be classified under 9973 specifically under 997337 as Licensing services for the right to use minerals including its exploration and evaluation or as any other service Ruling The services for the right to use minerals including its exploration and evaluation, as per Sr. No. 257 of the annexure appended to notification no. 11/2017-CT (Rate), dated 28.06.2017 is included in group 99733 under heading 9973. The royalty/dead rent paid/payable to the Government by the applicant is consideration against the transfer of right to use minerals including its exploration and evaluation as per the lease granted by the Government to the applicant. 2. What is the rate of GST on given services provided by State of Haryana to M/s Poineer Partners for which royalty is being paid Ruling The services for the right to use minerals including its exploration and evaluation , as per Sr. No. 257 of the annexure appended to notification no. 11/ 2017-CT (Rate), dated 28.06.2017 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. As per notification no. 1/ 2017-CT (Rate), dated 28.06.2017 under the CGST Act, 2017 and the corresponding State Tax notification under HGST Act , 2017, Schedule -I the stone boulders extracted by the applicant attract 5% GST (2.5 % CGST+ 2.5% HGST) as covered under HSN 2516 (At Sr. No. 124 of the notification). 3. Whether services provided by State Government of Haryana is governed by applicability of Notification No 13/ 2017-CT (Rate), dated 28.06.2017 under entry number 5 and whether M/s Poineer Partners is taxable person in this case to discharge GST under reverse charge mechanism or whether given service is covered by exclusion clause number {1} of entry no 5 and Stat Government of Haryana is liable to discharge GST on same Ruling As per entry no. 5 of the Notification No 13/2017-CT (Rate), dated 28.06.2017 under the CGST Act, 2017 and the corresponding Notification No. 48/ST-2 Dt. 30.06.2017 under the HGST Act, 2017, the recipient of such services, i.e., the applicant is liable to discharge the tax liability on such services provided to it by the Government on reverse charge basis.

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