The court, led by Justice C. Saravanan, held that the adjudication could proceed under the Central Goods and Service Tax Act, 2017, and the State GST Act. However, the recovery of GST, interest, and penalty would remain in abeyance until the Supreme Court’s decision.

[18/02, 08:36] sekarreporter1: [18/02, 08:36] sekarreporter1: https://www.taxscan.in/top-stories/gst-on-royalty-fee-kept-in-abeyance-pending-supreme-court-decision-madras-hc-disposes-writ-against-scn-1443119
[18/02, 08:36] sekarreporter1: English
[18/02, 08:36] Meta AI: The Madras High Court has disposed of a writ petition filed against a GST show cause notice (SCN) related to royalty fees, keeping the enforcement of the final order, including GST interest and penalty, in abeyance until the Supreme Court decides on the taxability issue.

The petitioner, M/s Dharmaraj, contested the GST SCN issued by the State GST authorities, proposing to levy GST on royalty fees paid to the State Government for extracting minor minerals. The petitioner argued that the demand was made without jurisdiction, as the issue of whether royalty is a taxable supply under the GST regime is pending before a Nine-Judge Constitution Bench of the Supreme Court. ¹

The court, led by Justice C. Saravanan, held that the adjudication could proceed under the Central Goods and Service Tax Act, 2017, and the State GST Act. However, the recovery of GST, interest, and penalty would remain in abeyance until the Supreme Court’s decision.

This ruling is consistent with previous decisions, where the Madras High Court has stayed GST recovery on seigniorage fees and mining leases pending the Supreme Court’s ruling on royalty. ² ³ ⁴

Would you like to know more about the Supreme Court’s decision on the taxability of royalty fees or the implications of this ruling on the mining industry?