Free-supplied materials excluded from GST valuation-components provided without consideration are not added to taxable value.

Materials supplied free of cost by service recipients for manufacture of site-mix/ready-mix concrete are not includable in the value of the taxable supply; applying the valuation principle in Section 15(2)(b) and Circular No.47/21/2018-GST, components provided free by the owner/recipient do not constitute supply for consideration and therefore are excluded from gross value. The legal effect is that such free-supplied goods are not exigible to GST, and the decision favours the assessee.

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Issues: Whether the value of materials supplied free of cost by service recipients to a service provider for manufacture of site mix/ready mix concrete is exigible to GST and includable in the value of the taxable supply.

Analysis: The question was examined in light of Section 15(2)(b) of the Central Goods and Services Tax Act, 2017 and Circular No. 47/21/2018-GST. The Court relied upon settled precedents holding that where goods/materials are supplied free of cost by the service recipient and no consideration is charged by the service provider for those goods/materials, such value does not form part of the gross value of the taxable supply. The Circular clarifies that components provided free of cost by the owner/manufacturer do not constitute supply for consideration and are not to be added to the value of the supply under Section 15(2)(b).

Conclusion: The value of materials supplied free of cost by the service recipients is not exigible to GST and is not includable in the value of the taxable supply. Decision is in favour of the assessee.

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