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The service of granting Mineral Mining Rights by the Government is a taxable supply of service under the provisions of GST. The scenario was the same in the earlier regime also and there was no ambiguity on it. However, there were some doubts with respect to the rate of tax at which the said service would be taxable. Various taxpayers from the industry have filed Advance Rulings before their respective Advance Ruling Authorities to obtain clarity on the Rate of tax applicable on Supply of Service of granting mining rights. The main contention raised by the Applicants M/s. United Mining Corporation and M/s. Pioneer Partners in their respective Applications before the Authority for Advance Ruling, Haryana was that the Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended vide Notification No. 01/2018-Central Tax (Rate) notifies the Central tax on intra-state supply of Service which includes Licensing services for the right to use minerals including its exploration and evaluation and the Royalty or Dead Rent paid by the applicant to the Government is nothing but an amount paid for getting right to use the minerals granted to it for a specified period as per terms of the lease. It was therefore contended that the services of right to use natural resources classify under heading 9973 and since description of service under Serial no. (i) to (vii) does not cover such services of right to use minerals therefore it would fall under the residual entry at serial no. 17(viii). Being so, the rate of tax applicable on such services shall be the same rate of tax as applicable on supply of like goods involving transfer of title in goods. The Authority for Advance Ruling was in consonance with the above submissions and decided the Application accordingly. However, the said Entry has now been amended with effect from 31.12.2018 by way of Notification No. 27/2018-CT(Rate) dated 31.12.2018 by way of which the rate of tax has been fixed at the rate of 18% instead of the same being dependant on the rate of tax on like goods involving transfer of title in goods. Similar Application has also been filed before the Authority for Advance Ruling, Rajasthan in the case of M/s. Aravali Polyart Pvt. Ltd. where it is held by the Authority on 15.02.2019 that they are in agreement with the fact that the said service falls under Entry (viii) of Serial no. 17 and falls under Chapter heading 9973 but in the light of the said Amendment, now the service of leasing of mineral mining rights would be at the rate of 18% and not at the rate of the like goods at which they are supplied with effect from 31.12.2018. Therefore, in the light of the above amendment the Tax Rate on Dead Rent / Royalty paid by the Taxpayer has been confirmed to be 18% and it will not be dependent on the rate of Supply of goods involved and the earlier Advance Rulings on this issue do not hold good because of the amendment in the GST Rate Notification for Services.

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