2026 (3) TMI 395

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....eby he has levied tax on the value of the material that was supplied free of cost to the petitioner by its contractees/service recipients for the manufacture of site mix/ready mix concrete. 2. Heard Dr. M.V.K. Moorthy, learned counsel for the petitioner, and Mr. B.V.S. Chalapathi Rao, learned Senior Standing Counsel for CBIC, for the respondents. 3. Brief overview of the facts leading to the lis in this writ petition may be stated as follows: (i) The petitioner is a partnership firm engaged in rendering the services of supplying site mix/ready mix concrete. The petitioner is a taxable person in terms of the registration certificate issued under the provisions of the Central Goods and Services Tax Act, 2017 (for short, 'the CG....

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.... aforesaid two companies. On the ground that the petitioner has undervalued the cost of the site mix/ready mix concrete supplied by it by excluding the value of the said materials received by it free of cost, which resulted in short payment of tax, the Joint Commissioner (CT) has initiated investigation and ultimately, by the impugned order, he has levied tax of Rs.3,56,94,184/- on the value of the above three components supplied to the petitioner free of cost by the service recipients. 4. Aggrieved thereby, the petitioner is before this Court by way of filing this writ petition, questioning the legal validity of the impugned order in imposing tax on the value of the said material supplied to it free of cost. 5. Therefore, whether the....

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....ught is relating to the issue whether the moulds and dies owned by the original equipment manufacturers that are sent free of cost to a component manufacturer is leviable to tax or not and whether the reverse input tax credit is required to be imposed or not. Answering the same, it is clarified that as moulds and dies are owned by the original equipment manufacturer and as they are provided to a component manufacturer free of cost, it does not constitute a supply, as there is no consideration involved in the transaction and that there is no requirement for reversal of input tax credit availed on such moulds and dies by the original equipment manufacturer. It is further clarified that while calculating the value of the supply made by the com....

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....ted (2018) 3 SCC 782 and Union of India v. Intercontinental Consultants and Technocrafts Pvt. Ltd. (2018) 4 SCC 669, wherein it is clearly held that the value of the materials/goods supplied free of cost by the service recipient to the service provider is not includable in the value of service, the High Court of Uttarakhand held that no tax can be levied on the fuel supplied free of cost to the petitioner therein and the value of free fuel cannot be added to the value of taxable supply. 11. In the judgment rendered in the case of Commissioner of Service Tax v. Bhayana Builders (P) Limited (supra), the Apex Court has considered the issue whether the value of materials/goods supplied free of cost by the service recipient to the service pro....