Sales tax on maintenance supplies applies where replacement parts and consumables pass as goods before use, even in service contracts.

Goods supplied under maintenance arrangements were taxable where property in tangible movables passed for consideration, even if the supply was incidental to service obligations. Replacement parts were treated as sales when actually supplied, because the uncertainty of replacement at the outset did not prevent a taxable transfer once it occurred. Toners and developers were not consumables excluded from the taxing rule, as they were supplied in deliverable form and property passed before consumption. The amounts received for parts, toners and developers were therefore liable to sales tax under the charging provision and the relevant definitions.

---

---

Issues: Whether the amounts received under maintenance agreements for replacement of parts and supply of toners and developers were exigible to sales tax; and whether such items could be treated as consumables outside the taxing provision.

Analysis: The agreements were not confined to service elements alone. Where parts were replaced, there was a transfer of property in tangible movables for a price, and the fact that the need for replacement was uncertain at the outset did not ate the existence of a sale when replacement actually occurred. The statutory definitions of sale and turnover, read with the charging provision, supported taxation of such transfers. The exclusion for consumables in the relevant rule was confined to items used up before property could pass. Toners and developers, however, were supplied in a deliverable state and, once placed in the machine, property passed before consumption. They were comparable to ink or petrol, which are sold first and consumed later.

Conclusion: The amounts received for parts, toners and developers were liable to sales tax, including under the maintenance arrangements.

Final Conclusion: The appeal failed because the disputed supplies were held to constitute taxable sales and not merely non-taxable service inputs.

Ratio Decidendi: Where goods supplied under a maintenance arrangement are transferred in a deliverable state and property passes before they are consumed, the transaction is a sale for tax purposes, even if the supply occurs incidentally to service obligations.

---