Case Law Details
In re M/s Penguin Trading and Agencies Limited (GST AAAR Odisha)
The Applicant has referred to Advance Ruling in the case of M/s Pioneer Partners, wherein the Haryana Authority for Advance Ruling held that “The services for the right to use minerals including its exploration and evaluation, as per Sr. No 257 of the annexure appended to Notification No 11/2017-CT (Rate) dtd. 28.06.2017 is included in group 99733 under heading 9973. Hence it attracts the same rate of tax as on supply of the like goods involving transfer of title in goods. The Applicant has also referred to Advance Ruling in the case of M/s NMDC limited, wherein the Chhattisgarh Authority for Advance Ruling held that “The royalty paid by M/s NMDC in respect of mining lease is classifiable under sub heading 997337; ‘Licensing services for the right to use minerals including its exploration and evaluation covered under entry no 17 of Notification No 11/2017-CT (Rate) dtd. 28.06.2017 attracting GST at the rate as applicable for the supply of like goods involving transfer of title in goods, under reverse charge basis.
We are not inclined to follow the aforesaid rulings of AAR, since they have passed their rulings without properly appreciating the consequences of amendments made vide notification no. 27/2018-Central Tax (Rate) dated 31.12.2018. The said rulings were passed without taking into cognizance, proposal and decision of GST council, consequent upon which the said notification was issued. Therefore, we are of the firm view that the interpretation which defeats the intention of the legislature should be avoided.
In view of our aforementioned findings, we hereby order that licensing services for the right to use minerals including its exploration and evaluation received by the Applicant is taxable @ 18 % [9 % CGST and 9 % OGST] during 07/2017 to 12/2018. Thus, the reference from the Odisha Authority for Advance Ruling stands disposed of accordingly.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, ODISHA
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