CS Advocate Abhishek Goyal
Off late, there has been a debate on the issue of whether GST is payable on royalty charged from mine owners by the state government. Royalty is the consideration which is charged by the state government from mine owners on account of excavation from mines which belong to state government.
This issue has been an old one which was prevalent even under the erstwhile service tax regime. When the issue of levy of service tax on royalty came up before the honorable Rajasthan HC in the matter of M/s Udaipur Chambers of Commerce and Industries, the Rajasthan HC held that royalty is consideration paid for mining excavation service and hence exigible to service tax.
The petitioners then filed an SLP before the honorable Supreme Court against this judgment which is pending as on date for adjudication.
Meanwhile, after coming into force of GST, one case on levy of GST on royalty came up before the honorable SC in case of Lakhvinder Singh Vs UOI. In this case the honorable Court stayed the proceedings for recovery of GST on royalty till adjudication of the case.
However on 4.1.22 the honorable SC has rejected the writ in this case on technical grounds without going into merits by holding that the petitioners must first exhaust the alternative remedy before the jurisdictional HC before coming directly to Supreme Court. Accordingly, the stay on recovery of GST on royalty has also been vacated.
What are the implications of this judgment on this issue? What is the latest position? What is the position on this issue in the state of Rajasthan?
Here I am sharing the link of youtube video for the benefit of all who are interested in knowing more about this issue.
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