The Himachal Pradesh High Court has upheld the GST on royalty paid by mineral concession holders for any mining concession granted by state.
The bench of Acting Chief Justice Tarlok Singh Chauhan and Justice Satyen Vaidya has observed that the judgment rendered in India Cement Ltd.’s case has now been overruled by Nine-Judge Bench of the Supreme Court in Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr. In which it has been held that royalty is not a tax.
Background – GST on royalty paid by mineral concession holders
The petitioner/assessee has raised the issue whether there can be levy of GST on royalty paid by the mineral concession holder for any mining concession granted by the State.
The petitioner relied on the judgement rendered by Seven- Judge Bench of the Supreme Court in India Cement Ltd. and ors. vs. State of Tamil Nadu and ors. In which it was declared that royalty itself is a tax.
Earlier the demand for GST on royalty by the respondents was stayed by the Division Bench of the Court.
Conclusion
The court upheld the notices and dismissed the petition of the assessee.
Case Details
Case Title: M/s Lakhwinder Singh Stone Crusher Versus Union of India & ors.
Case No.: CWP No. 8637/2023
Date: 4.11.2024
Counsel For Petitioner: Arvind Sharma
Counsel For Respondent: Anup Rattan
