Balaji Ready Mix Concrete Vs Union of India (Andhra Pradesh High court)
The Andhra Pradesh High Court, in Balaji Ready Mix Concrete v. Union of India, examined the legality of an order dated 27.03.2023 passed by the Joint Commissioner (CT), Guntur, levying tax on the value of materials supplied free of cost to the petitioner by its contractees for manufacture of site mix/ready mix concrete.
The petitioner, a registered partnership firm under the CGST Act, 2017, was engaged in supplying site mix/ready mix concrete. Two contractees placed orders for supply of concrete at specified sites. For preparation of the concrete, cement, admixture, and waterproofing material—essential components—were supplied to the petitioner free of cost by the contractees. The petitioner bore the cost of other components used in manufacturing the concrete. After completing manufacture using both free-of-cost materials and self-procured components, the petitioner supplied the finished concrete.
The total value of materials supplied free of cost was Rs.19,83,01,024/-. While discharging GST on its taxable supplies, the petitioner did not include this value in its taxable turnover. The Joint Commissioner initiated proceedings on the ground that exclusion of the value of free-of-cost materials resulted in undervaluation and short payment of tax, and ultimately levied tax of Rs.3,56,94,184/- on the value of such materials.
