Time of supply— In the instant case, the applicant is engaged in business of mining and mineral for which they have obtained the various mining sites across the country on lease for excavating minerals. For obtaining the mines, the applicant has made upfront payment to government and the said upfront payment is adjusted in full at the earliest against the amount payable to government production of minerals.

The applicant raised the question whether the upfront payment made by the applicant to the State Government is in the nature of Deposit in terms of Section 2(31) of the MP GST Act, 2017 or is in the nature of advance paid, to determine the time of supply in terms of Section 13(3) of the MP GST Act, 2017 ?”

In this case the upfront payment is payable in three installments and after payment of third installment, the State Government shall grant the mining lease to the successful bidder.

In this case, the mining lease is granted after the payment of third installment. The upfront payment made to the state government is treated as advance against the revenue share from the date of allotment of mines and the GST is payable on this advance from the date of allotment of mines to the applicant.

There is clear provision in law for liability of GST in case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis in case of applicant under the provision of Section 13(3) of MP GST Act, 2017, therefore we hold that the applicant is liable to pay service tax from the date of allotment of mines on lease by the government as the payment made by the Applicant to state Government is an advance.

Held that—  It is ruled that the upfront payment made to the state Government is in the nature of advance from the date of allotment of mines on lease to the applicant for the purpose of determining the time of supply under GST Law as per the Section 13(3) of MP GST Act, 2017 and hence applicant is liable to pay service tax from the date of allotment of mines on lease by the government as the upfront payment made by the Applicant to state Government is an advance.