Page 180 - GSTL_16th July 2020_Vol. 38_Part 3

418 GST LAW TIMES [ Vol. 38
wise he shall be charged a penalty for non-achievement of target.
The applicant will get consideration at the rate of Rs. 400 per ton of
the mineral extract.
(2) We find that the applicant has not taken lease of the mining land, in
fact, whatever material is extracted, be it mineral or overburden ma-
terial, is owned by M/s. AMP. It seems that M/s. AMP has engaged
applicant mainly to do mining work on his behalf and extract the
minerals against which applicant will receive consideration. The
applicant has to develop infrastructure viz. site office, workers stay
facility etc. as per his convenience and as per his need, M/s. AMP
has nowhere in the agreement stated that he requires or mandates
the applicant to construct such facilities on the mining site. M/s.
AMP’s sole focus in the agreement is on achievement of extraction
target of the mineral.
(3) In view of Para 1 and Para 2, we observe that, the applicant is
providing a support to M/s. AMP in extraction of mineral and
therefore it is a kind of supplying support Service. Whereas the
supply cannot be categorized as that of goods due to the fact that
minerals and mining site both are under the ownership of M/s.
AMP throughout agreement and post-agreement too. The applicant
is just facilitating/supporting M/s. AMP in extraction of the miner-
al. Thus the activity undertaken by the applicant is a ‘Service’ under
CGST Act, 2017. The Section 2(102) defines Services as following -
(102) ”services” means anything other than goods, money and
securities but includes activities relating to the use of money or
its conversion by cash or by any other mode, from one form,
currency or denomination, to another form, currency or denom-
ination for which a separate consideration is charged;
The Section 2(52) defines Goods as following -
(52) “goods” means every kind of movable property other
than money and securities but includes actionable claim, grow-
ing crops, grass and things attached to or forming part of the
land which are agreed to be severed before supply or under a
contract of supply;
Whereas, the mineral extracted by the applicant from the mining
site is no doubt a ‘goods’ which is extracted from the land but since
the applicant do not have any ownership of the said mineral and
land before the agreement, in duration of agreement and post-
agreement, therefore the activity is just a service to M/s. AMP.
(4) In view of above, we find that the applicant is providing supporting
service related to mining. The said service is classifiable under HSN
9986 22. The rate of GST on the said service is 18% (CGST 9% +
SGST 9%) as provided under the Notification No. 11/2017-Central
Tax (Rate), dated 28-6-2017 (as amended). The relevant portion of
the said Notification is as under -

GST LAW TIMES  16th July 2020  180