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The services for the right to use minerals including its exploration and evaluation is classifiable under Heading 9973 and taxable @18%

Classification of Supply In the instant case, applicant is engaged in the business of mining activity on a plot of land leased from the government of Gujarat and exploring, drilling, processing etc., of products derived from such mines and stone quarry lands. The applicant is quarrying “BLACK TRAP”. BLACKTRAP material attracts GST at 5% under Heading 2517.

The Applicant has entered into Quarrying lease/license agreement for “BLACKTRAP” material with the Government of Gujarat on various terms and conditions.

The applicant seeks advance ruling on following question-
(i) What is the classification of service provided for which royalty is being paid.

(ii) What is rate of GST on given services provided by State of Gujarat to M/s Giriraj quarry works 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

The activity undertaken by the applicant attracts 18% GST.—Giriraj Quarry Works, In Re… [2020] 26 TAXLOK.COM 091 (AAR-Gujarat)