Agency payments are not discount when a sole selling agent acts under dealer control and earns commission, not price abatement.

Amounts paid to a sole selling agent were not deductible from turnover as discount under the Andhra Pradesh General Sales Tax Act and Rules because the arrangement was one of agency, not sale and purchase. The agreement fixed sale prices, described the relationship as sole selling agency, provided for commission, and required the agent to act under the dealer's directions while the dealer retained control over the business. The surrounding documents showed sales to customers through the agent rather than sales by the dealer to the agent. On those facts, the payments were commission and not a price abatement on a sale, so deduction from total turnover was not available.

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Issues: Whether amounts paid to a sole selling agent could be deducted from turnover as discount under section 2(s)(ii) of the Andhra Pradesh General Sales Tax Act and rule 6(1)(a) of the Andhra Pradesh General Sales Tax Rules.

Analysis: The deduction was allowable only if the payment was a discount allowed in respect of a sale. The agreement between the parties described the arrangement as sole selling agency, fixed the sale prices, provided for commission, required the agent to act under the dealer's directions, and retained control over the business. The surrounding documents showed sales to customers through the agent, not sales by the dealer to the agent. On these facts, the relationship was one of agency and not vendor and purchaser, so the payments were commission and not a price abatement on a sale.

Conclusion: The amounts paid to the sole selling agent were not discount within section 2(s)(ii) and rule 6(1)(a), and the petitioner was not entitled to deduct them from total turnover.

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