A petition has been filed before the Punjab and Haryana high court seeking directions not to levy the goods and services tax (GST) on royalty/dead rent paid by mining concession holders for any mining concession granted by the state.
Directions have also been sought to declare that GST on dead rent/royalty payable under a mineral concession granted by the state is illegal.
The matter has reached before the court in the wake of a petition filed by Riddhi Siddhi-KSM Resources JV. The petitioner company has sought directions to quash notification number 11/ 2017- Central Tax (rate) dated June 28, 2017, and the notifications issued by the Haryana government to the effect that no GST could be levied on royalty/dead rent paid by mining concession holder for any mining concession granted by the state, and declared that goods and services tax (GST) on dead rent/royalty payable under a mineral concession granted by the state was illegal.
Directions have also been sought to refund the amount to the petitioner paid by it towards GST on dead rent/royalty.
As per the notification, the rate of central tax would be 2.5%. Similar provisions exist in corresponding notifications issued under the Haryana state goods and services tax 2017, which would bring the total rate of GST sought to be imposed on mining royalty that rent at 5%. GST is levied on reverse charge basis, meaning thereby that the receiver of the perceived service is liable to pay the tax.
It has also been stated that mining royalty/dead rent is itself tax and there can be no tax on tax.
Petitioner company, which is into the business of mining is aggrieved of the summons issued on June 14, 2021, by deputy excise and taxation commissioner, Hisar, to the petitioner regarding non-payment of GST (reserve).
It has been argued the petitioner company cannot be asked to pay GST on this, as several high courts of the country have already stayed the orders of states concerned asking for GST on such grounds.
The Union ministry of finance, excise and taxation department, Central Board of Indirect Taxes and Customs through its chairman and deputy excise and taxation commissioner (ST), Hisar, has been impleaded as respondents in the case. The petition has been filed, but it is yet to be listed for hearing.