18% GST is subjected to be paid on the forest permit fee, the Telangana Appellate Authority for Advance Ruling (AAAR) stated.
The two-member bench consists of B.P. Naga Siva Kumari tracked, the permit fees obtained via the forest council would be utilised by forest officials to track the activity of mining, assess quantity and type of mineral being quarried, conduct surveys, and keep a constant eye on the movement of the produce, and does not concern with the social or farm forestry.
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The petitioner would be in the field of coal extraction. The petitioner would be a government-owned coal mining company. The governments of Telangana and India both are stakeholders in the company. In Telangana, they would use to operate mines. They secure coal mining projects in different places. The petitioner would enter into contracts with a host of vendors or suppliers for the coal extraction.
As per Rule 3 of the State Forest Product Transit, they would be responsible to pay a specific amount for proceeding into the mined coal via the forest area under the permit fee of Rs 10 per ton of coal transported.
The petitioner asks for the advance ruling to find out if the GST would draw a reverse charge on the amount filed to the forest department. When the GST would be levied on the forest permit fee filed via the petitioner, would the services obtained by the petitioner be categorized under heading 9973 of GST Notification No. 11/2017 Central Tax (Rate) dated June 28, 2017, and thus be eligible for a lower rate of tax for the period before 1st January 2019?
Petitioner argued, that notification no. 12/2017 would get exempted from any services furnished via the central government or state government concerning the operations entrusted to panchayats under Article 243G of the constitution for the period 26-07-2018.
The petitioner mentioned, the services furnished via the state government i.e the forest department concerning social forestry and farm forestry which would be specified at entry no. 6 of the eleventh schedule of the constitution, and therefore they are qualified for exemption till July 26, 2018.
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GST is subjected to get filed on the forest permit fee on the grounds of reverse charge as AAAR ruled that the legal payment incurred to the forest department according to Rule (3) of the state forest produce the transit rule could be considered as a supply.
| Applicant Name | M/s Singareni Colleries Company Ltd |
| Appeal No | AAAR/14/2022 |
| Date | 30.12.2022 |
| GST AAAR | Read Order |
