GST on Royalty —- The petitioners challenged the SCNs, directing them to furnish data relating to payment of royalty against licensing services for right to use minerals including exploration and evaluation for different periods concerning levy of GST on royalty. The petitioners sought declaration that royalty is not a payment in respect of a taxable service and as such there is no liability to pay GST on royalty and DMF. The counsel for the petitioners pressed the prayer for interim protection from levy of GST on royalty and DMF or continuation of the interim protection granted earlier in some of the writ petitions. The respondent counsel submitted that the matter may be posted for final hearing and no interim protection may be granted and further submitted that royalty amounts to a consideration on which GST can be levied. The court observed that the decision of the Apex Court by the 7 Judges Constitution Bench in the case of India Cements Ltd. that royalty is a tax is under consideration before a 9 Judges Constitution Bench of the Apex Court. Following the interim order passed by the Apex Court in the case of M/s Lakhwinder Singh dated 04.10.2021, this Court had been pleased to grant interim protection on levy of GST on mining lease / royalty/DMF. The petitioners have made out a case for interim protection.

Held that:- The Hon’ble High Court stayed recovery of GST for grant of mining lease/ royalty/DMF from the petitioners till further orders and listed these matters in the 1st week of July, 2022.