Fine in lieu of Confiscation under GST Act to be calculated on Market Value & not the MRP: Kerala HC

The dispute emerges from an inspection conducted by the officers of the Kerala State GST Department on 03-08-2021, who seized, as per Rule 139(2) of the Central Goods and Services Tax Rules, 2017, (for brevity ‘the Rules’), beedis, stored by the respondent in this review petition in his different godowns.

It was argued that the phrase ‘market value’ used in section 130(2) has to be understood in the light of the definition of the word as defined in section 2(73) of the Act and therefore, the intention of the legislature is unambiguous that, MRP is not to be used for calculating the fine in lieu of confiscation.

Order of Court:

The basis for calculating the fine in lieu of confiscation under section 130 of the Act is only the market value as defined under section 2(73) of the Act and not the maximum retail price.