Levy of GST on the value of by-products i.e., broken rice, bran and husk treating them as part of the consideration for milling of the paddy, is legally unsustainable.
Levy of GST- The petitioner prays for a writ of mandamus declaring that the Assessment Order passed by the respondent levying GST on the value of broken rice, bran and husk obtained by the petitioner on milling of the paddy of the respondent.
Whether the impugned assessment order levying GST on the estimated by-products value, treating such by-products as part of the consideration for milling, is legally sustainable under the provisions of CGST/APGST Act, 2017 or not?
we hold that the by-products form part of compensation but not consideration. We are constrained to hold that in the impugned order, the 1st respondent erroneously concluded that the miller was allowed to retain the by-products towards consideration, though such import is impermissible from the terms of the agreement. Therefore, the impugned order to the extent of including the value of by-products to the milling charges and assessing tax is legally unsustainable.
In the result, this Writ Petition is allowed and the impugned Assessment Order passed by the 1st respondent as it relates to the levy of GST on the value of by-products i.e., broken rice, bran and husk treating them as part of the consideration paid to the petitioner for milling of the paddy, is set aside.