GST is Payable under RCM on Royalty Payment: HP High Court

Hon'ble Himachal High Court in the case of M/s Lakhwinder Singh Stone Crusher has held that GST is payable under RCM on Royalty Payment. (Copy of the Order is provided at the end of the Article)

It has held that Nine Judge Bench of Hon'ble SC in the case of Mineral Area Development Authority & anr. has overruled its earlier decision in the case of India Cement Ltd.’s where it was held that Royalty is nature of Tax.

Now since Hon'ble SC has held that Royalty is not in nature of " Tax", Department is well with in its right to levy GST on the royalty paid by the mineral concession holder for any mining concession granted by the State.

For more details on dispute of Royalty Payment, please read our earlier article on the issue: Everything to Know about GST on Royalty Payment

This decision will also have impact on cases pertaining to Service Tax Period.

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Copy of the Order:

HP HC Order on Royalty.pdf

Download PDF • 141KB

Disclaimer: We have tried to simplify the Hon’ble Court Decision based on our understanding purely for academic purpose. In case, there is any mistake in understanding of the order, we are apologised to the Hon’ble Court.