Jharkhand HC stays Levy of GST under RCM on amount of Royalty, District Mineral Fund Contribution paid on Minor Mineral Lease [Read Order]

Jharkhand High Court - Levy - GST - RCM - Amount of Royalty - District Mineral Fund Contribution paid - Minor mineral lease - District Mineral Fund Contribution - Taxscan

The Jharkhand High Court has stayed levy of GST under Reverse Charge Mechanism on the amount of Royalty and District Mineral Fund Contribution paid in respect of minor mineral lease.

As many as 5 petitions were filed seeking declaration that no GST is leviable on the amount of Royalty and District Mineral Fund Contribution paid by him to the State of Jharkhand. Apart from petitioner has also sought quashing of the notice issued by the Respondent to the extent that the Respondents have held that there is liability towards payment of GST under Reverse Charge Mechanism for the period July 2017 to March 2020 on the amount of Royalty and District Mineral Fund Contribution paid by the petitioner to the State of Jharkhand in respect of mining lease of stone boulders executed in favour of the petitioner by the State of Jharkhand.

The petitioners has referred to the order dated 02.03.2021 passed in the batch of writ petitions led by WPT No. 3878/2020. This court upon consideration of the pleadings on record and rival submission of the parties, had stayed the recovery of service tax for grant of mining lease / royalty from the petitioners. 

It was submitted by the petitioners that the court had however refused to grant interim protection, so far as levy of CGST and/or JGST is concerned. The counsel for the petitioners therein had approached the Supreme Court of India against refusal of interim protection, so far as levy of CGST on the payment of royalty and District Mineral Fund Contribution is concerned. Learned counsel for the petitioners further submits that those Special Leave Petitions have been permitted to be withdrawn vide order dated 03.01.2022 passed by the as the petitioners proposed to avail the remedy available to them under law. It is submitted that the same issue of levy of GST on royalty and District Mineral Fund Contribution had cropped up in Writ Petition in the case of M/s Lakhwinder Singh Versus Union of India & others. 

The division bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan on consideration of the materials on record placed by the parties and in view of interim protection granted by the Apex Court in Writ Petition (Civil) No. 1076/2021 in the case of M/s Lakhwinder Singh Versus Union of India & others and, that the petitioners herein, lessee of minor mineral, also raised similar issues of levy of GST on royalty and District Mineral Fund Contribution, we deem it proper to grant similar interim relief (s) to the petitioners herein. Accordingly, until further orders, payment of GST for grant of mining lease/royalty by the petitioners, shall remain stayed.

“Counsel for the Respondent CGST and State of Jharkhand are allowed three weeks’ time to file counter affidavit in the matter. One week’s time thereafter is allowed to the learned counsel for the petitioners to file a reply, if so advised,” the court said.

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