HYDERABAD: The Telangana High Court has directed the Central Tax and Goods and Services Tax (GST) authorities, along with the state government to file their counter-affidavits regarding the levy of GST on deductions made towards mining royalty, seigniorage, District Mineral Foundation (DMF), and State Mineral Exploration Trust (SMET) payments.

A division bench comprising Chief Justice Aparesh Kumar Singh and Justice G M Mohiuddin heard a writ petition filed by

M/s PLR, NCC, NECL Joint Venture, which is engaged in major infrastructure and irrigation projects including the Kaleshwaram (KLIS) and Palamuru–Rangareddy Lift Irrigation Schemes.

Petitioner’s counsel P Venkata Prasad cited the recent nine-judge bench judgment of the Supreme Court in Mineral Area Development Authority vs Steel Authority of India (2024), which held that royalty on mineral mining does not constitute a tax.

The apex court also ruled that including licensing services for the right to use minerals within the ambit of GST is impermissible.

Taking note of these submissions, the high court issued notices to the GST officials and the state government, directing them to file their responses within three weeks.

Source: The New Indian Express