Royalty is not a tax but a contractual payment: Chhattisgarh HC

Mahesh Sharma Vs Union of India (Chhattisgarh High Court)

Chhattisgarh High Court, in Mahesh Sharma v. Union of India (WPT No. 151 of 2024), dismissed a writ petition challenging a Show Cause Notice (SCN) demanding service tax on royalty payments. The petitioner, Mahesh Sharma, argued that royalty constitutes a tax and, therefore, should not be subject to additional taxation under the Finance Act, 1994. The Revenue Department issued an SCN on October 20, 2021, demanding service tax of ₹36,000, including Swachh Bharat Cess and Krishi Kalyan Cess. This was followed by a no

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