In re Uttarakhand Forest Development (GST AAR Uttarakhand)
What will be applicable rate for GST on royalty payable to Govt of Uttarakhand under RCM in respect of Reta, Bazri & Boulders extracted as per the permission of Govt authorities.
The services rendered by the applicant during the period 01.07.2017 to 31.12.2018 attract GST at the same rate of central tax as on supply of like goods involving transfer of title in goods i.e 5% and w.e.f 01.01.2019 the said service attract GST@ 18%.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING,UTTARAKHAND
RULING
1. This is an application under Sub-Section (1) of Section 97 of the CGST/SGST Act, 2017 (herein after referred to as Act) and the rules made thereunder filed by M/s. Uttarakhand Forest Development Corporation, 73-Nehru Road, Dehradun, Uttarakhand (here in after referred to as ‘the applicant’) is registered with the GSTN having Registration No. 05AAALU0009M0ZG and seeking advance ruling on the following question:
a. What will be applicable rate for GST on royalty payable to Govt of Uttarakhand under RCM in respect of Reta, Bazri & Boulders extracted as per the permission of Govt authorities.
2. Advance Ruling under GST means a decision provided by the authority or the appellate authority to an applicant on matters or on questions specified in sub section (2) of section 97 or sub section (1) of section 100 in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.
3. As per the said subsection (2) of Section 97 of the Act advance ruling can be sought by an applicant in respect of:
(a) Classification of any goods or services or both
(b) Applicability of a notification issued under the provisions of this Act,
(c) Determination of time and value of supply of goods or services or both,
(d) Admissibility of input tax credit of tax paid or deemed to have been paid
(e) Determination of the liability to pay tax on any goods or services or both
(f) Whether the applicant is required to be registered
(g) Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both within the meaning of that term
4. Since applicant has sought advance ruling on determination of tax liability, therefore, in terms of said Section 97(2)(e) of the Act, the application filed by the applicant was admitted. Accordingly hearing was fixed on 21.01.2020 which was attended by the Shri Anand Singh Rawat, Chartered Accountant on behalf of the applicant. During the course of hearing Shri Manish Mishra (DC) ,concerned officer of SGST-Uttarakhand was also present.
5. On perusal of record, we find that the applicant is a Govt, body constituted under Act of State Assembly of Uttarakhand State. The applicant is sole agency for removal and sale of forest produce from the entire forest area in Uttarakhand. The applicant has various forest related activities, one of the activity is allow to extract minor minerals (Reta, Bazri, Boulders) from river bed in the forest area of Uttarakhand and makes sale of it to the buyers in open market. The applicant pays royalty for extraction of minor minerals on the rates fixed by Govt, of Uttarakhand to State Govt, of Uttarakhand. The applicant is depositing GST under RCM on royalty by 18% and collecting 5% on sale price from buyers.
6. In the present case we are not deciding any wider question but restricting our conclusion to the facts and circumstances which was filed for our consideration in the application. In this context Notification 11/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time) is reproduced below:
Notification No. 11/2017-Central Tax (Rate) 28th June, 2017
G.S.R (E).- In exercise of the powers conferred by sub-section (1) of section 9, subsection (1) of section 11, sub-section (5) of section 15 and sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby notifies that the central tax, on the intra-State supply of services of description as specified in column (3) of the Table below, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2), shall be levied at the rate as specified in the corresponding entry in column (4), subject to the conditions as specified in the corresponding entry in column (5) of the said Table:-
