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GST ON ROYALTY PAID TO STATE GOVERNMENT.

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Amal Mukherjee

24 Points Posted on 11 July 2020

My firm has received a notice now from the cgst authorities for paying service tax (rcm) against royalty paid to Government for mining activities. Period is from 01/04/16 to 30/06/17. Next comes gst. The same situation is here also. My item is china clay , taxable @ 5% I had no service tax registration. I have never paid gst against royalty . CBIC website is saying that I should pay rcm @ 5% against royalty paid for mining activities. Cases are pending before Supreme court in similar matters. What to do, please suggest.

Replies (2)

Quick Summary

This discussion addresses the complexities of Goods and Services Tax (GST) on royalty payments made to state governments for mining activities. The original poster received a notice for unpaid Service Tax under Reverse Charge Mechanism (RCM) on royalty for mining, and is now facing similar issues with GST. Despite the CBIC website indicating RCM is applicable, there are pending Supreme Court cases on similar matters, creating uncertainty for businesses.

Ravi SADhiyan

Practice

3087 Points Posted on 11 July 2020

Originally posted by : Amal Mukherjee
	My firm has received a notice now from the cgst authorities for paying service tax (rcm) against royalty paid to Government for mining activities. Period is from 01/04/16 to 30/06/17. Next comes gst. The same situation is here also. My item is china clay , taxable @ 5% I had no service tax registration. I have never paid gst against royalty . CBIC website is saying that I should pay rcm @ 5% against royalty paid for mining activities. Cases are pending before Supreme court in similar matters. What to do, please suggest.