2026-VIL-1292-CESTAT-ALH-ST
  1. Home
  2. 2026-VIL-1292-CESTAT-ALH-ST

SERVICE TAX CESTAT Cases

Service Tax – Taxability of royalty paid on mining lease under Reverse Charge Mechanism – Appellant is an individual holding a mining lease for extraction of minerals from the State of Uttar Pradesh and paid royalty to the State Government but did not register with the Department, did not pay any service tax, and did not file the prescribed ST-3 returns – Department issued show cause notice demanding service tax on the royalty amount under reverse charge mechanism along with interest and penalties - Whether royalty paid by a mining lessee to the State Government for extraction of minerals constitutes consideration for service and is taxable under service tax law – HELD – Royalty is a contractual consideration paid by the mining lessee to the Government for the enjoyment of mineral rights and assignment of rights to use natural resources – The Supreme Court in Mineral Area Development Authority Versus Steel Authority of India has held that royalty is not a tax but a contractual consideration arising out of contractual conditions of the mining lease – Any activity undertaken by Government against a consideration constitutes a service, and even if such activity is undertaken as a statutory or mandatory requirement under law, it is taxable if payment is made as quid pro quo for the service received – Services provided by Government to a business entity became chargeable to service tax with effect from 01.04.2016. The services provided by Govt where the gross amount charged exceeds Rs. 5000 in a financial year are taxable and no exemption is available – The appellant cannot claim benefit of threshold exemption under Notification 33/2012-ST as it applies only to service providers and not on services received under RCM – The extended period of limitation under Section 73 is invokable as there is suppression of facts with intent to evade payment of service tax – The appellant deliberately failed to register, pay service tax and file returns despite clarity provided through Circular No. 192/02/2016-ST dated 13.04.2016 on taxability of such services – Penalties under Sections 77 and 78 of the Finance Act, 1994 are upheld for violation of statutory obligations and for suppression with intent to evade payment – The demand of service tax with interest and penalties is upheld and the appeal is dismissed
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GSTAT Filing Near: Closing Resolutions...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?