This discussion clarifies the Goods and Services Tax (GST) applicable to royalty payments made to government mining departments. It confirms that such payments fall under the Reverse Charge Mechanism (RCM) as per Notification No. 13/2017 - Central Tax (Rate). The applicable GST rate for the royalty is determined by the specific mining resource for which the royalty is paid, such as sand.
As per Entry No. 5 of Notification No. 13/2017 - Central Tax (Rate) , royalty to Govt is under RCM.
RCM Rate Applicable : For example, if the royalty charges is paid for extraction of sand, then the GST rate applicable on the sand shall be considered for discharging GST on the royalty.
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