In re Singareni Colleries Company Ltd (GST AAAR Telangana)
The appeal was decided by the GST Appellate Authority for Advance Ruling, Telangana under Section 100 of the Telangana Goods and Services Tax Act, 2017, against Advance Ruling Order No. 31/2022 dated 07.06.2022 passed by the Telangana State Authority for Advance Ruling. The applicant is a government-owned coal mining company, jointly owned by the Government of Telangana and the Government of India, engaged in extraction of coal through mining leases in the State of Telangana.
Under the Mines and Minerals (Development and Regulation) Act, 1957, the applicant is required to pay royalty to the State Government based on the quantity of minerals extracted. In addition, Section 9B mandates contribution of 30% of royalty to the District Mineral Foundation (DMF), and Section 9C mandates contribution of 2% of royalty to the National Mineral Exploration Trust (NMET). The applicant sought advance ruling on the classification and taxability of royalty payments and on the GST liability applicable to contributions made to DMF and NMET.
The Authority for Advance Ruling, in its order dated 07.06.2022, ruled that royalty paid in respect of mining lease fell under tariff item 997337 and attracted GST at 9% CGST and 9% SGST. It further ruled that the same tax rate applicable to entry 997337 would apply to contributions made to DMF and NMET.
