Gujarat High Court quashes ₹43.43 crore GST demand against Amul

A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati set aside the assessment of ₹43,43,12,441. The ruling, reported on October 19th, 2026, concerned a demand covering tax, interest and penalties for the period from July 2017 to March 2019.

The original order had been issued by central tax authorities. Officials argued that the federation should have raised internal cross-charge invoices for expenses incurred at its head office and allocated them to its marketing branches and sales depots across India. They alleged that the failure amounted to deliberate non-disclosure under Section 74 of the Central Goods and Services Tax Act.

The court rejected the fraud and wilful-suppression allegations. It found that the relevant expenditure had been recorded in the federation's ledgers, financial statements and audited balance sheets. The judgment also stated that the central management of common corporate functions, without internal cross-charge invoices, did not by itself justify the use of statutory provisions concerning tax evasion.

The dispute focused on the valuation rules for transactions between establishments holding separate GST registrations. Rule 28 generally applies where such establishments are treated as distinct persons. Circulars issued by the Central Board of Indirect Taxes and Customs state that, when the receiving branch can claim full input-tax credit, the value shown by the head office is treated as the open-market value. Where no invoice is issued for shared services, the second proviso to Rule 28 permits a nil value.

The federation's regional branches and depots were eligible for full input-tax credit, according to the judgment. The court therefore treated the arrangement as revenue-neutral, since the tax paid by one registration could be credited by another. It also rejected the authorities' method of allocating central overheads in proportion to branch turnover for the purpose of creating a taxable value.

Amul's head office in Anand, Gujarat, coordinates activities for the federation, which represents district dairy unions and their producers. The expenses at issue included national advertising and publicity, information-technology systems, maintenance contracts and legal services, as well as costs relating to central employees. The ruling removed the assessment arising from those shared administrative expenses.