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2023 (4) TMI 960 - AAR - GSTClassification of supply - Valuation - supply of goods or supply of services or both - manufacture and supply Precast Manholes and Rises to various government and non government entities - price to be charged from the recipient i.e. M/s Larsen & Toubro Ltd by the applicant for supply of precast manhole shall be transaction value in terms of Section 15(1) of the CGST/ RGST Act 2017 - material which are to be made available free of cost by the recipient - forming part of the transaction value for the purpose of levy of tax or not? HELD THAT:- It is observed that it is imperative for any act to be service that should not be goods. It would be worthwhile to mention that applicant himself stated that he has intention to manufacture and supply Precast Manholes and Rises. Even the manufacturing process submitted by the applicant itself shows that the applicant is engaged in manufacturing of goods ie Precast Manholes and Rises. The Precast Manholes and Rises are movable property; hence we conclude that supply of Precast Manholes and Rises is supply of goods and not a supply of services on the basis of aforesaid findings. The manufacturing activities carried out by applicant do not fall under the ambit of job work as it involved whole manufacturing process for manufacturing of Precast Manholes and Rises and it cannot be termed as any treatment or process undertaken by a person on goods belonging to another registered person. Even concept of job work in GST is govern by different set of Rules and procedures and these are not question in hand. Hence in this case Precast Manholes and Rises are to be manufactured by applicant on order from recipient wherein main ingredients are supplied by recipient, and applicant will manufacture a fresh Precast Manholes and Rises, so the ownership of goods remains with applicant hence Subject supply is supply of goods under GST Act 2017. Valuation - inclusion of value of material supplied Free of Cost (FOC) by the buyer - HELD THAT:-t Free of cost supply of main ingredients from recipient is nothing but mutual understanding between both parties which do not debar them from the essence of supply of goods and consideration received under GST. - Combine readings of provisions of section 15, we hold from such type of adjustments applicant will receive the consideration in barter. I.e. one consideration in the shape of price as per agreement and second in the shape of free issue of essential inputs like cement and steels. The price to be charged from the recipient i.e. M/s Larsen & Toubro Ltd by the applicant for supply of precast manhole shall not be transaction value in terms of Section 15(1) of the CGST / RGST Act 2017 - the material which are to be made available free of cost by the recipient and are not within the scope of applicant for supply of precast manhole shall form part of the transaction value for the purpose of levy of tax.
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