RCM on royalty in Stone Crusher business

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Pankaj (Querist)
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13 September 2024 Respected sir & madam,
My one client is engaged in Stone Crusher business. He pay royalty to collector office & collect raw stone & crush it in his crusher plant & sale Khadi it in local market. He collect 5 % GST on sales. I have a questions that is there required to pay RCM on royalty paid by him ? If yes please at which rate & any circular is available . If RCM paid on such royalty it can be used as like ITC against next month’s GST liability?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 September 2024 The client is liable to pay GST on royalty amounts under the RCM. The services received by the client fall under the category of ‘Licensing services for the right to use minerals’. As per Notification No. 11/2017-CT (Rate), the GST rate for a service similar to the sale of goods (transfer in ownership) is the same as the rate of their supply.

ITC can be claimed.