Imported machinery movement without a taxable supply falls outside GST charging provisions and attracts only exempted-goods penalty treatment.

Imported machinery moved by the importer from the port to its own factory after customs clearance was treated as outside the scope of supply because there was no transfer between two persons and no consideration. On that basis, the movement did not attract the charging provision under the Maharashtra GST law and no GST was payable on the transport. For detention and penalty, the goods were treated as exempted goods, so the special penalty limb applicable to exempted goods under Section 129 applied. The penalty basis linked to tax payable could not be used, and the two penalty limbs were treated as mutually exclusive in operation.

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Issues: Whether movement of imported machinery by the importer from the port to its own factory, without an e-way bill, attracted liability to tax under the charging provisions and, if not, whether penalty under Section 129 of the Maharashtra Goods and Services Tax Act, 2017 was to be restricted to the amount prescribed for exempted goods.

Analysis: The machinery was imported under exemption and was being transported by the importer to its own factory after customs clearance. The movement did not involve a supply between two persons, nor was there consideration, so the transaction did not fall within the scope of supply under Section 7 of the Maharashtra Goods and Services Tax Act, 2017. In the absence of a taxable supply, the charging provision under Section 9 of the Maharashtra Goods and Services Tax Act, 2017 was not attracted and no tax was payable on the movement. Since the goods were non-taxable and therefore to be treated as exempted goods for the purpose of detention and penalty, the special limb applicable to exempted goods under Section 129 had to be applied. The limb applying penalty on the basis of tax payable could not be invoked, and the penalty provisions were held to be mutually exclusive in their operation.

Conclusion: The importer was not liable to pay GST on the movement of the machinery, and the penalty was confined to Rs. 25,000 for each petition under Section 129 of the Maharashtra Goods and Services Tax Act, 2017.

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