GST valuation must follow transaction value; MRP alone cannot displace invoice value without evidence of undervaluation.

Under GST valuation, taxable value ordinarily follows the transaction value, being the price actually paid or payable where the parties are not related and price is the sole consideration. The authority relied only on maximum retail price and did not produce material to show that the invoice value was not the true transaction value, nor did it conduct an independent inquiry to establish undervaluation. In the absence of a statutory basis to substitute MRP for invoice value on the facts, the confiscation order and consequential tax, penalty and redemption fine were set aside, and the undervaluation allegation was rejected.

---

---

Issues: Whether the goods could be treated as undervalued on the basis of maximum retail price, and whether the consequential demand, penalty and redemption fine were sustainable.

Analysis: Under the GST valuation scheme, the taxable value is ordinarily the transaction value, being the price actually paid or payable where the supplier and recipient are not related and price is the sole consideration. The adjudicating authority proceeded only on the basis of maximum retail price and did not place material on record to show that the declared invoice value was not the true transaction value. No independent inquiry or verification was undertaken to establish undervaluation. In the absence of any statutory basis for valuing the goods on MRP in the facts of the case, the confiscation order and the consequential levy could not be sustained.

Conclusion: The allegation of undervaluation was rejected, and the impugned order imposing tax, penalty and redemption fine was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the entire consequential demand and penalties were annulled.

Ratio Decidendi: Under GST, valuation must rest on the transaction value unless the statute permits departure from it on legally established grounds; MRP alone cannot be used to displace invoice value without supporting evidence of undervaluation.

---