Licensing services for the right to use minerals including its exploration and evaluation’ which is classifiable under SAC 997337 and attracts 18% GST
Classification of service— The Applicant has been granted a mining lease for extracting Mineral called “BLACKTRAP” at village : Borvai, Taluka : Dhansura, Distt: Sabarkantha, State: Gujarat by the State Govt. on various terms and conditions as per the Grant Order and Lease deed. The applicant not only sells the Black Trap which is been excavated from the mine in the market, but it also uses the Black Trap aggregate material for its own use since the applicant main business is constructing state and national highways, city roads and bridges.
(i) Whether said service can be classified under Tariff Heading 9973 as item No. (iii) Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash deferred payment or other valuable consideration. Or item No. (viia) Leasing or renting of goods as any other service under the said chapter?
(ii) What shall be the rate of GST on given services provided by State of Gujarat to applicant for which royalty is being paid?
Held that— The activity undertaken by the applicant is classifiable under Heading 9973 (Leasing or rental services, with or without operator), as mentioned in the annexure at Serial No. 257 (Licensing services for the right to use minerals including its exploration and evaluation) sub-heading 997337 of Notification Number 11/2017-C.T. (Rate), dated 28-6-2017.
Licensing services for the right to use minerals including its exploration and evaluation’ which is classifiable under SAC 9973 37 will be covered under residual entry No. (viii) of the Notification No. 11/2017-(Rate) Central Tax dated 28.06.2017. The activity undertaken by the applicant attracts 18% GST