2026-VIL-04-AAAR
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SGST AAAR

GST – Telangana AAAR – Taxability of Contribution made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) - Whether the statutory contributions made to DMF and NMET as per the MMDR Act, 1957, which are independent trusts having the status of corporeal person, can be treated as consideration for mining lease – HELD - For this mining activities, appellant are required to contribute an amount of 30% of royalty towards DMF and 2% of royalty towards NMET under the specific provisions of the MMDR Act. This payment to both the trusts is on account of their mining operations being carried out in the State. Thus these contributions get covered under ‘any other activity whether or not it is for a pecuniary benefit and also towards furtherance of their business’. Accordingly, the applicant’s payment to DMF and NMET merits as a part of mining royalty which is paid in the course or furtherance of business – However, in view of Circular no.206/18/2023-GST dt. 31.10.2023 have, it is ruled that the contribution made towards DMF is not liable to GST. The clarification does not cover the contributions towards NMET. Therefore, the contribution towards NMET is liable to GST - In respect of contribution to DMF Trust, the appeal is allowed and it is ruled that GST is not applicable to this extent - In respect of contribution to NMET as per Mines and Minerals (Development & Regulation) Act, 1957 (MMDR Act, 1957), there is no merit in the appeal filed by the appellant and thus the ruling of the lower authority is upheld – Ordered accordingly
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