GST on Royalty – OnlineTaxUpdate

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

byCA Pradeep Modi07/09/202507/09/2025

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

GST Article High Court

Royalty is not a tax but a contractual payment

byCA Bimal Jain07/02/202507/02/2025

The Hon’ble Chhattisgarh High Court in Mahesh Sharma dismissed the writ petition challenging the SCN demanding service tax on royalty. The court relied on the Supreme Court’s ruling in Mineral Area Development Authority v. Steel Authority of India [Civil Application Nos. 4056-4064 of 1999 dated July 25, 2024] and held that royalty is not a tax but a contractual payment.

GST Article Supreme Court

Supreme Court reaffirms royalty is not in the nature of tax as review petition filed dismissed

byCA Bimal Jain11/10/202411/10/2024

The Hon’ble Supreme Court in the case of Karnataka Iron and Steel Manufacturers Association dismissed the review petition filed against the judgment passed by the Hon’ble Supreme Court in the case of Mineral Area Development Authority v. M/s. Steel Authority of India and Anr. [Civil Appeal No. 4056-4064 of 1999 dated July 25, 2024] wherein it was held that the royalty paid to the government would not fall within the purview of tax.

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