Freight and handling charges before sale were not deductible from taxable turnover under Kerala sales tax rules.

Freight and handling charges incurred to transport liquor from the factories to the dealer's warehouse before sale were held not deductible from taxable turnover under rule 9(f) of the Kerala General Sales Tax Rules, 1963. Deduction under that rule applies only to separately specified freight or delivery charges incidental to the sale, or to charges incurred for and on behalf of the purchaser after the sale. Because the expenditure was incurred before sale to make the goods available for sale, it formed part of the price component and could not be excluded from turnover.

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Issues: Whether freight and handling charges incurred for transporting liquor from the factories to the dealer's warehouse at Ernakulam could be deducted from taxable turnover under rule 9(f) of the Kerala General Sales Tax Rules, 1963.

Analysis: Rule 9(f) permits deduction only of freight and charges for packing and delivery when they are separately specified and charged and are incidental to the sale, or are incurred for and on behalf of the purchaser after the sale. The amounts in question were incurred before the sale, for bringing the goods from the factories to the dealer's warehouse so that they could be made available for sale at Ernakulam. Such expenditure formed part of the price component and was not a deductible post-sale charge.

Conclusion: The freight and handling charges were not admissible deductions from the taxable turnover.

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