Reverse charge— In the instant case, the present appeal has been filed against the order of Authority for Advance Ruling.

NMDC limited is a state-controlled mineral producer of the Government of India. It is owned by the Government of India and is under administrative control of the Ministry of Steel. It is iron ore producer and exporter producing about 30 million tons of iron ore from 3 fully mechanised mines in Chhattisgarh and Karnataka.

Questions as were raised before AAR are as under: -

1. Whether royalty paid in respect of Mining Lease can be classified under “Licensing services for the right to use minerals including its exploration and evaluation falling under the heading 9973 attracting GST at the same rate of tax as applicable on supply of like goods involving transfer of title in goods”?

2. Determination of the liability to pay tax on contributions made to District Mineral foundation (DMF) and National mineral Exploration trust (NMET) as per MMDR Act, 1957.

RULLING PRONOUNCED BY AUTHORITY FOR ADVANCE RULING (AAR)

1. In respect of the first question raised by the Applicant regarding the classification of service by way of granting of license to extract minerals, we rule that the said service shall be classified under Tariff Heading 99733.

2. In respect of the second question raised by the Applicant regarding the taxability or otherwise of the additional contributions made to DMF and NMET, we rule that the said contributions are nothing but additions to the royalty payable for the original supply itself, and is therefore liable to be added to the value of the original supply and treated accordingly for the purposes of GST.

AAR has in its order also held that being a business entity the appellant is liable to pay tax on this supply of services under reverse charge mechanism as per notification 13/2017 central tax (rate) dated 28.06.2017. Hence, the order of AAR is confirmed in absolute terms.

Held that— The Appellant is liable to pay GST under reverse charge on the contributions made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) as per Mines and Minerals (Development and Regulation) Act, 1957.