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18% GST on Mining Licences till December 2018: AAR

  • Jun 5, 2020 | Divita S Gupta

The Authority for Advance Ruling in the State of Uttarakhand has observed that taxpayers with licenses that allow extraction or use of minerals including exploration and evaluation are to be classified under Service Code 997337, covered under Sr. No. 257 of Annexure appended to Notification No. 11/2017-Central Tax (Rate).

The applicant sought an advance ruling for clarification on the GST rate that should be levied on licensing services for the right to use minerals, including its exploration and evaluation.

As the service in question was provided during the period July 1st, 2017and December 31st, 2018, it will attract the Goods and Services Tax at the same rate as central tax as on the supply of goods involving the transfer of title in goods attract 5 per cent GST the said service attracts GST the rate of 18 per cent.

The ruling issued by the Authority for Advance Ruling stated the following -

The issue of classification and applicable tax rate as on the date of passing the advance ruling has already been decided by the Authority for Advance Ruling in the State of Uttarakhand as April 2019-20. It has been held that the services rendered fall under residual entry 17 viz. they are covered under the services code 997337, covered under Sr. No. 257 of Annexure appended to Notification No. 11/2017-Central Tax (Rate). As such, services rendered to the applicant will attract a tax rate of 18 per cent.


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Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.