FAQ’s on GST rate on Mining under the GST
Hemlata Khandelwal / 2021-03-20 10:32:27

  1. Can small mining leaseholders with a turnover of at least Rs 75 crore operate under the composition scheme?

According to section 10 (1) of the CGST Act, 2017 a registered person has a GST Registration online. Complete turnover in the foregoing pecuniary year did not soar Rs. 75 lakhs will be eligible to pay GST under the composition scheme.

  1.  What is the rate of GST in the composition scheme for ores and minerals?

In the case where the process is created, the tax rate will be 1% (CGST) and 1% (SGST / UTSTST). In any other case, the rate will be other% (CGST) and SG% (SGST / UTGST).

  1. Will the Mining holder deposited GST aside under CGST / SGST heads?

Yes. Distinct GST has to be paid under SGST and CGST / UTGST by producing a single challan under a single return through the general portal.

  1. If one avails the composition scheme, can a small mine leaseholder supply inter-state?

If a supplier wants to take advantage of the composition scheme, it will not make inter-state supplies.

  1. What is the rate of IGST for ores and minerals in the terms of inter-state supply?

Currently, the IGST rate is the sum of the CGST and SGST / UTGST rates. These rates have been notified and are available in the public domain.

  1. Can the buyer get input credit on the supply of minerals from the mine owner in the composition scheme?

No, the buyer cannot avail of the tax credit paid by the supplier which is under the composition scheme as the person paying the tax under the composition scheme cannot issue a tax invoice and does not collect tax on his supply.

  1. Whether payee has to pay tax under reverse charge?

GST on reverse charge mechanism is payable under section 9 (4) of CGST Act, 2017, only in case of purchase from unregistered suppliers. A registered person Under the composition scheme, the mine owner who is paying the tax, the recipient is not required to pay GST on the reverse charge mechanism

  1. What is the limit for migrating a small mine owner/leaseholder to the full GST system under the composition scheme?

As per Section 10 (3) of the CGST Act, 2017, the option taken by the owner/lessee of the small mine will come into effect from the day on which its total turnover during the financial year is Rs. 75 lakhs. For information on other conditions, Section 10 of the CGST Act, 2017 and the rules made thereunder may be referred.

  1. Are return filing and compliance under the composition scheme simple?

Yes, the GST return filing and compliance under the composition scheme is simple. The GST registration holder / the person has to file one return only on a three-month basis in Form GSTR-4.

  1. Will the basic exemption limit from GST in mining apply to small and micro areas?

Yes, the basic exemption limit of Rs. 40 lakhs (Rs. 20 lakhs in the case of special category states) also apply to small and micro-segments in mining. However, a person making a taxable supply and having a total annual turnover (more than Rs 20 lakh in any state other than the states of a particular state) will be liable to get registration under GST. The GST Return filing is to be filed on a monthly basis by regular taxable persons and on a quarterly basis by taxable persons registered under the composition scheme.


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