GST on Mining Royalty – A 360 degree analysis

Ranjan Mehta & Komal Suthar – [2021] 132 taxmann.com 254 (Article)

Earlier, under the Service Tax Regime when Negative list-based taxation was introduced, only select services provided by the Government were out of Service Tax purview via Negative list and the rest were covered under Service Tax. Later, the list was amended to bring all the services provided by the Government under levy of tax.

Since then, there has been a constant tussle between the tax authorities and the mining lease holders as to whether grant of mining lease by a government was a taxable service, thereby attracting Service Tax. This issue continued to bother the mining – trade/industry continuing into the GST regime as well because the statutory liability for payment of tax on such government services fell on the recipient of such services. In this article, the authors discussed the concept of levy of Royalty on Mineral Deposits and its taxability under Service Tax and GST in light of judicial decisions.

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