The Gujarat Authority of Advance Ruling (AAR) ruled that 18% Goods and Service Tax (GST) is applicable to services provided by the State of Gujarat to Giriraj Quarry Works for which Royalty is being paid.
The Applicant, M/s. Giriraj Quarry Works is engaged in the business of quarrying of “Black Trap” in the State of Gujarat. The said product is classified under Tariff Heading 2517 and is leviable to GST on their supply at the rate of 5% in Schedule-I.
The applicant submitted that they have been granted a mining lease for extracting “Stone along with associated minor minerals” at village Udaipur District Desar, Gujarat by the State of government on various terms and conditions as the agreement.
The applicant sought the Advance Ruling on the issue of 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, for which royalty is being paid.
The other issue raised was what is the rate of GST on given services provided by the State of Gujarat to M/s Giriraj Quarry Works for which Royalty is being paid.
The two-member bench of Sanjay Saxena and Mohit Agarwal ruled that the activity undertaken by the applicant is classifiable under Heading 9973 i.e. leasing or rental services, with or without operator, as mentioned in the annexure at Serial No. 257, Licensing services for the right to use minerals including its exploration and evaluation sub-heading 997337 of Notification Number 11/2017-C.T. (Rate), dated June 28, 2017.
“The activity undertaken by the applicant attracts 18% GST (9% CGST+ 9% SGST),” the AAR ruled.
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