Page 107 - GSTL_30th April 2020_Vol 35_Part 5

2020 ] IN RE : COSME COSTA & SONS 593
exploration of areas for regional and detailed exploration, giving priority par-
ticularly to strategic and critical minerals, etc. by NMET independently and can-
not be considered as consideration towards mining right.
4.6 The applicant further submitted that the Bombay High Court in the
case of Bai Mumbai Trust v. Suchitra Wd/o Sadhu Koraga Shetty - Suit (L) No. 236 of
2017, dated September 13, 2019 [2019 (31) G.S.T.L. 193 (Bom.)], while holding that
a supply must involve reciprocal obligations, observed that there should be en-
forceable reciprocal obligations for supply and unilateral acts, or any resulting
payment of damages cannot be encompassed into supply. The applicant further
argued that in a recent CBIC circular, where the issue of levy of GST on the ser-
vice of display of name in the premises of charitable organisation receiving dona-
tions was clarified, the Board has clarified that where the recipient is under no
obligation (quid pro quo) to do anything in return of donation or gift, there is no
GST liability on such receipt. Evidently, it can be inferred that where there is
merely some payment and no reciprocal activity/service/goods is supplied, the
payment wouldn’t be considered to be made against a ‘supply’ and no GST
would be leviable on such payments. Artificially, interpreting such activities as
‘supply’, merely because there is a consideration, being a unilateral act, would
tantamount to superfluous interpretation of the law. A prerequisite is that the
supply and the payment of consideration thereof must have reciprocity with
each other. Consideration could be monetary or a non-monetary consideration.
In respect of contribution to DMF Fund and GMOPFT fund, the applicant has
made submission similar as that of contribution to NMET Fund.
Personal Hearing :
5. Personal Hearing in the matter was fixed and conducted on 24-1-
2020 and Shri Abhinav Srivastava, duly authorised by the applicant appeared for
hearing. Shri Abhinav Srivastava reiterated the arguments and contentions made
in the application and as produced above.
Discussion and Findings :
6. The applicant, M/s. Cosme Costa & Sons is a registered partnership
firm engaged in the business of extraction and sale of iron ore. In order to con-
duct the activity of extraction of iron ore, applicant was mandated to obtain fol-
lowing licenses :
• Lease deed for TC 110/1953 which was valid till 2027, (which now
stands cancelled)
• Permissions from State Pollution Control Board
• Environmental Clearance accorded by Ministry of Environment &
Forests
• Mining Plan by Indian Bureau of Mines (IBM) & Directorate Gen-
eral of Mines Safety (DGMS)
Further, Section 9 of the Mines and Minerals (Development & Regulation) Act,
1957 mandate the applicant to pay royalty to the State Government of Goa at the
rate of 15% of the average sale price of iron ore. In addition, the applicant is also
required to make a payment to National Mineral Exploration Trust (NMET) @
2% of the royalty paid to the Government of Goa. They were also required to pay
statutory contribution to District Mineral Foundation (DMF) @ 30% of the royal-
ty. The applicant is also mandated to pay 10% of the sale proceeds to the Goa
Mineral Ore Permanent Fund Trust (GMOPFT).
GST LAW TIMES  30th April 2020  107