High Court Rules Royalty for Mining as Taxable Under GST at 18% Rate

• BSCPL obtained sand ghat leases from the State Mines and Geology Department for five years, paying a settlement amount in installments.
• Under VAT, BSCPL paid 5 percent VAT under reverse charge mechanism for mineral rights licensing services, which continued under GST initially.
• The Advance Ruling Authority ruled 5 percent GST until 31.12.2018 and 18 percent thereafter, while the Appellate Authority held it taxable at 18 percent from 01.07.2017.
• The Supreme Court clarified that royalty is a contractual consideration for mineral rights, not a tax, and can be taxed.
• The High Court upheld that royalty is a consideration for mineral rights, validating the 18 percent GST rate imposed by the Appellate Authority.

Source: a2ztaxcorp.net

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.