AAR Rejects Concessional GST Rate on Mining Lease Services; Upholds 18% GST on Mineral Extraction Royalty

AAR Rejects Concessional GST Rate on Mining Lease Services; Upholds 18% GST on Mineral Extraction Royalty

The company, Ramandeep Upkarsingh Bindra (Black Rock Crusher), has filed an application dated August 19, 2020, seeking the Maharashtra Authority for Advance Ruling (AAR) under Section 97 of the Central Goods and Services Tax Act, 2017, and the Maharashtra Goods and Services Tax Act, 2017.

The applicant is registered under the Goods and Services Tax Act 2017 and has a registered address at Haladgaon, Panchgaon Road, Nagpur, Maharashtra, 440103. The applicant is engaged in the business of extracting minerals, crushing them, and then selling them.

The applicant wanted to obtain a mining lease from the state government for the exploration of minerals like black rock, stones, and other minerals against consideration in the form of royalty/dead rent to the state government. In the context of the same applicant, they entered into a lease transfer agreement. But the applicant obtained a title to the land under the mining operation through a sale agreement, enforced on April 29, 2015.