Gujarat Co-operative Milk Marketing Federation Limited, popularly known as Amul, serves as the apex body for various milk cooperatives and operates from its Head office in Anand, Gujarat. During the period from July 2017 to March 2019.
The Federation incurred general corporate expenses, including advertising and promotion, IT infrastructure, annual maintenance services, legal and litigation matters, insurance, and employee salaries, but did not allocate these costs proportionately among its branches and depots through cross-charging.
GST officials alleged that the head office had provided services to its various establishments, and the expenses incurred on these services fell within the scope of GST.
Invoking Section 74 of the ‘Central Goods and Services Tax Act, 2017′, officials issued a ‘show-cause-cum-demand notice’ on August 31, 2022.
It alleges an intent to evade taxes by concealing facts. Through an Order-in-Original dated January 1, 2025, the Additional Commissioner of CGST upheld an IGST demand of Rs 43,43,12,441, along with applicable interest and penalties. Aggrieved by this order, the Federation approached the Gujarat High Court.
The Gujarat High Court has noted that the Head office and branches or depots carrying separate GST registrations across distinct States are considered as distinct places, and supplies between them in the course or furtherance of business can attract GST even without consideration.
However, the court clarified the distinction between establishments operating under separate GST registrations and branches operating under a single registration.
It was stated that the examination of cross-charging must be conducted with regard to the applicable registration and valuation provisions, and that it cannot be applied indiscriminately to all internal allocations of expenses.
The Court noted that CBIC Circular No. 199/11/2023-GST dated July 17, 2023, and Circular No. 210/4/2024-GST dated June 26, 2024, stated that the valuation of services supplied between related or distinct persons.
Where the receiver is qualified for ITC, and the head officer has not issued a tax invoice for a specific service, the value of that service can be considered to be Nil under the second proviso to Rule 28 of the CGST Rules.
Read Also: Gujarat HC Sets Aside GST Demand, Rules ITC Can’t Be Denied on Non-Taxable Transactions
The Gujarat High Court permitted the writ petition and set aside the Order-in-Original No. 74/CGST/(Ahmedabad South)/ADC/PBM/24-25 dated January 1, 2025, which had confirmed the IGST demand of Rs. 43,43,12,441 against Gujarat Co-operative Milk Marketing Federation Limited, along with interest and penalty. The court finalised the rule.
| Case Title | M/s Gujarat Co-Operative Milk Marketing Federation Limited vs. Union of India & Ors. |
| Case No. | No. 7085 of 2025 |
| For the Petitioner | Mr Amal Paresh Dave, Mr Paresh M Dave |
| For the Respondent | Ms Hetvi H Sancheti |
| Gujarat High Court | Read Order |
