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Our Clint is in business of Mining/ Extraction of Minerals and Trading of Sand. Our client is purchasing royalty from Government, Whether GST is payable on the Royalty Purchased from Government in Reverse Charge as Government is Not registered under GST.

Dear Sir/Madam,

Our Clint is in business of Mining/ Extraction of Minerals and Trading of Sand. Our client is purchasing royalty from Government, Whether GST is payable on the Royalty Purchased from Government in Reverse Charge as Government is Not registered under GST.

Please guide us on the same matter.

Thanking You.

Reply

Sir,
GST on royalty will apply under reverse charge mechanism. Further, such payment of GST under reverse charge mechanism would be eligible as ITC in the hands of the recipient of supply for payment of GST (answered by CBEC in Published Booklet of FAQs on Mining).

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