By Our Correspondent
NEW DELHI/BHUBANESWAR: Vice-President of Federation of Indian Mineral Industries, FIMI, RL Mohanty on Friday demanded GST Reforms in Mining Sector. While speaking at a webinar on “GST in Mining –Issues & Challenges”, hosted by FIMI, Mohanty said the mining industry faces acute financial difficulty in utilization of the input tax credit availed by the owners on their purchases of input materials, capital goods and services etc. While higher rate of GST is charged on supplies and services whereas GST on mineral and processed mineral is payable @5% and as such it becomes a case of inverted duty structure.
“I would also like to highlight another issue of rationalization of GST on Royalty.Currently, GST @18% is charged on the royalty amount while on sale of minerals GST @5% is charged. It is important to have GST on royalty on same rate as applicable for sale of minerals @5%.Moreover, in the current, difficult and challenging scenario after the outbreak of COVID19 pandemic, the mining industry is passing through a period of high uncertainty as the mineral based manufacturing sector is yet to come back to normal Pre-COVID level of production. With most of the players grappling for liquidity, the sector is experiencing unprecedented stress as the domestic demand for products is yet to pick up. Considering the present economic scenario and high effective tax rate on mining in India, it is necessary to have a uniformity in GST rates for sustained growth of mining sector. I strongly believe that the deliberations during this event will be lively and interactive and it will help in understanding the issues and challenges and suggest further reforms in the GST structure for sustained growth of mining sector,” Mohanty said.
Shantesh Gureddi, Vice President, FIMI and representatives from Lakshmikumaran and Sridharan Attorneys, R.K. Sharma, Secretary General, FIMI, distinguished industry leaders have joined the webinar. “GST was introduced w.e.f. 1st July 2017 to replace multi-layered, complex indirect tax structure with a simple, transparent and technology–driven tax regime to facilitate economic growth. While the introduction of e-way bill has enabled hassle free movement of minerals and other goods, but still the mining sector faces several issues and challenges relating to payment of GST on royalty, DMF and NMET contribution, inverted duty structure, upfront payment etc. With these words, I once again welcome you all to the online event on “GST in Mining–Issues & Challenges” and wish all the very best,” Mohanty added.
