GST APPLICABLE ON MINERAL ROYALTY PAID TO GOVERMENT HOW ?
1 Replies
Rohit Tibrewal
(Student & Senior Accountant)
(3193 Points)
Replied 10 September 2018
Central Board of Excise and Customs (CBEC), it was clarified that the license fee, lease charge, royalty etc paid to the Government for assigning the right to use natural resources are subject to Goods and Services Tax (GST) under reverse charge. It stated that “The Government provides license to various companies including Public Sector Undertakings for exploration of natural resources like oil, hydrocarbons, iron ore, manganese, etc. For having assigned the rights to use the natural resources, the licensee companies are required to pay consideration in the form of annual license fee, lease charges, royalty, etc to the Government. The activity of assignment of rights to use natural resources is treated as supply of services and the licensee is required to pay tax on the amount of consideration paid in the form of royalty or any other form under reverse charge mechanism.”
Under RCM : You need to pay the tax
Under RCM : You need to pay the tax
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