Maharashtra State Mining Corporation GST Advance Ruling Withdrawal
The Authority for Advance Ruling allowed the applicant to withdraw their request, leaving all tax questions regarding coal supply undecided.
- Ruling
- NO.GST-ARA-22/2025-26/B-85, dated 20/05/2026
- Dated
- 20 May 2026
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- The company asked about GST rates for beneficiated coal and coal rejects.
- The company also asked about the applicability of Compensation Cess on coal rejects.
- The applicant voluntarily requested to withdraw the application before a decision was made.
- The Authority closed the case without providing any ruling on the tax issues.
In short
The Maharashtra State Mining Corporation Limited asked the Authority for Advance Ruling (AAR) to clarify how to tax coal services and coal rejects. Before the authority could decide, the company asked to withdraw its request because the issue was already resolved. Because the case was withdrawn, the authority did not provide any guidance on the tax rates or the Compensation Cess.
What has changed
How it worked before
Businesses often look to advance rulings to understand how to apply GST rates and Compensation Cess to complex coal supply chains.
What has changed
Nothing changed. Because the application was withdrawn, the authority did not issue a decision. This means there is no new guidance or precedent for other businesses to follow regarding coal beneficiation or coal rejects.
Who this affects
Mining companies and coal suppliers dealing with GST rates and Compensation Cess on coal products.
What you should do
Do not rely on this order for tax planning. Since the authority did not rule on the merits, this document provides no legal guidance. If you have a similar question, you must consult your own tax advisor or file your own application for an advance ruling.
If you do nothing
If you assume this order sets a rule for your business, you risk applying the wrong tax rate or failing to pay the correct Compensation Cess. A tax officer is not bound by this order and may disagree with your interpretation. You could face penalties and interest for incorrect tax payments if you rely on a case that was never decided.
The terms explained
- Advance Ruling
- A formal decision from the tax department that clarifies how GST laws apply to a specific business transaction.
- Beneficiated Coal
- Coal that has been processed or washed to remove impurities and improve its quality.
- Compensation Cess
- An additional tax levied on certain goods, like coal, to compensate states for potential revenue losses under the GST system.
The ruling in detail
Authority for Advance Ruling
M/s. MAHARASHTRA STATE MINING CORPORATION LIMITED
NO.GST-ARA-22/2025-26/B-85, dated 20/05/2026 · Maharashtra
Questions before the authority
- Which rates of GST should be applied in the invoice raised for delivery of Beneficiated (Washed Coal) to MAHAGENCO?
- Whether the Invoice should be for 18% for the entire transaction or 5% (RCM) / 12% forward charge for transportation and 18% for the benficiation and loading services under the agreement?
- In spite of the notification dated 2/2018- Compensation Cess dated 26th July 2018 regarding charging NIL Compensation cess on Coal rejects supplied by a coal washery, arising out of coal on which compensation Cess has been paid and no input tax credit thereof has been availed by anyone, Can MAHAGENCO charge Compensation cess on sale of rejects to the Applicant company i.e. MAHARASHTRA State MINING CORPORATION LTD (MSMC) applicant company?
- In the chain of back-to-back transactions, should the applicant company charge Compensation cess on sale of rejects to the contractors?
Facts
The applicant is a State Public Sector undertaking involved in the systematic development of mines and mineral conservation. They sought an advance ruling regarding the appropriate GST rates and Compensation Cess applicability for the supply of beneficiated coal and coal rejects to MAHAGENCO and contractors. The application was filed on 13.02.2021.
Ruling
The Authority did not provide a ruling on the merits of the questions presented. The applicant voluntarily requested to withdraw the application, stating that the purpose for which the ruling was sought had been resolved. Consequently, the Authority allowed the withdrawal and disposed of the application without addressing the substantive tax issues.
Reasoning
The applicant submitted an email dated 12.05.2026 expressing their desire to withdraw the application as the underlying issues were resolved. Under the provisions of the CGST Act and MGST Act, the Authority permitted the **unconditional withdrawal** of the application. As a result, the Authority did not proceed to examine the merits or the specific tax questions raised by the applicant.
Provisions relied on
- Section 97 of the Central Goods and Services Tax Act, 2017
- Section 98 of the Central Goods and Services Tax Act, 2017
- Section 97 of the Maharashtra Goods and Services Tax Act, 2017
- Section 98 of the Maharashtra Goods and Services Tax Act, 2017
For the practitioner
This order is of **no precedential value** regarding the taxability of coal beneficiation or compensation cess on coal rejects. It serves only as a procedural record of the applicant's decision to withdraw their request. Practitioners should note that the substantive questions regarding GST rates and cess applicability remain **undecided** by this forum.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/7-maharashtra_state_mining_corporation_ltd_withdrawn_order.pdf
Legibility of the scan, as read: high.
Prepared 11-10-2026.
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