2025 (4) TMI 1499 - HC - GST

Levy of GST on the conversion charges and on the estimated value of the by-products treating them as consideration for milling - Milling of paddy for distribution of rice under PDS - HELD THAT - The judgment of the Division Bench of this Court in SHIRIDI SAINATH INDUSTRIES VERSUS DEPUTY COMMISSIONER OF SERVICES TAX (INTERNATIONAL TAXATION) 2021 (1) TMI 175 - ANDHRA PRADESH HIGH COURT would be squarely applicable to these cases also and no G.S.T. can be levied on the value of the broken rice husk bran retained by the petitioners after completion of the milling of the paddy entrusted to them by the 2nd respondent-Civil Supplies Corporation. These Writ Petitions are allowed setting aside the impugned assessment orders dated 25.10.2024 24.10.2024.

Summary

The Andhra Pradesh High Court, through a common order by Justice R. Raghunandan Rao, addressed writ petitions filed by rice millers engaged in milling paddy supplied under the Public Distribution Scheme. The millers retained by-products-husk, broken rice, and bran-and sold them separately, paying GST only on bran. The 1st respondent sought to levy GST on the conversion charges and on the estimated value of these by-products, treating them as consideration for milling.The Court relied on its earlier Division Bench judgment dated 20.11.2020 in W.P.No.45971 of 2018, which held that "no G.S.T. could be levied on the value of the husk, broken rice and bran retained by the millers." Despite the State's pending Special Leave Petition before the Supreme Court without any stay, the 1st respondent proceeded with assessments, which the Court found "not only incomprehensible but invalid."The Court held that the earlier judgment is "squarely applicable" and thus set aside the impugned assessment orders dated 24 and 25 October 2024, ruling that "no G.S.T. can be levied on the value of the broken rice, husk & bran retained by the petitioners." The writ petitions were allowed with no order as to costs, and pending applications were closed.