GST DAILY – 347 : Assessee is liable to pay service tax on royalty paid for mining lease since royalty is not a tax; HC

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Assessee is liable to pay service tax on royalty paid for mining lease since royalty is not a tax;HC

THE HON’BLE CHHATTISGARH HIGH COURT IN THE CASE OF Mahesh Sharma V/s Union of India W.P.T. No. 151 of 2024, decided on 2-8-2024

 👉 Issue:-

✔️ What are the tax liabilities that arise on royalty paid for mining lease?

👉 The Hon’ble High Court Judgement:-

✔️ Where show cause notice was issued to petitioner demanding tax on royalty and same was challenged on grounds that royalty itself was tax, therefore there was no tax payable on same, since it was settled in Mineral Area Development Authority v. Steel Authority of India (2024) 21 Centax 378 (S.C.) by Apex court holding that royalty is not a tax and its merely a contractual consideration paid by mining lessee to lessor, contention of petitioner could not be appreciated and petitioner was to be disposed of.

Section 9 of Central Goods and Services Tax Act, 2017 read with Section 73 of Finance Act, 1994