Royalty payments to the Mining Department for procurement of murum - GST input
This query is : Resolved
Magesh Sambath
(Querist)
23 October 2026
Dear Sir/Madam,
We are making frequent royalty payments to the Mining Department for procurement of murum. Along with royalty, the department is recovering DMF charges and SI charges. Further, GST @ 18% is being levied on the SI charges.
In my view, since GST is being charged separately on the SI charges and the minerals are being procured for use in the course of business, the GST paid on SI charges should qualify as Input Tax Credit (ITC).
or RCM only applicable , please suggest us
We are making frequent royalty payments to the Mining Department for procurement of murum. Along with royalty, the department is recovering DMF charges and SI charges. Further, GST @ 18% is being levied on the SI charges.
In my view, since GST is being charged separately on the SI charges and the minerals are being procured for use in the course of business, the GST paid on SI charges should qualify as Input Tax Credit (ITC).
or RCM only applicable , please suggest us
24 October 2026
RCM Status: GST on royalty and DMF charges is payable under Reverse Charge Mechanism (RCM) by the recipient.
ITC Eligibility: The GST paid (both under RCM for royalty/DMF and separately on SI charges) qualifies as Input Tax Credit (ITC), provided the minerals are used in the course or furtherance of business.
ITC Eligibility: The GST paid (both under RCM for royalty/DMF and separately on SI charges) qualifies as Input Tax Credit (ITC), provided the minerals are used in the course or furtherance of business.
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