Purchase price excludes purchaser-incurred collection, transport and crushing charges where the seller did not perform or charge for those services.

Under the Orissa Sales Tax Act, 1947, purchase price includes amounts payable as valuable consideration and sums charged by the seller for anything done in respect of the goods before delivery, excluding separately charged freight, delivery or installation charges. Where forest produce was to be plucked, collected, transported and crushed by the purchaser itself, those activities were not performed by the seller and no corresponding charge was made by the seller. On that basis, the collection, transport and crushing charges were not part of the purchase price and did not form part of the turnover of purchases liable to sales tax.

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Issues: Whether collection, transport and crushing charges incurred by the purchaser in obtaining forest produce are includible in the purchase price and thus form part of the turnover of purchases liable to sales tax.

Analysis: The definition of purchase price under section 2(ee) of the Orissa Sales Tax Act, 1947 covers the amount payable as valuable consideration and includes sums charged for anything done by the seller in respect of the goods at or before delivery, other than freight, delivery or installation charges separately charged. The definition of turnover of purchases under section 2(j) is based on the purchase price paid or payable. In the present arrangement, the forest produce was to be plucked, collected, transported and crushed by the purchaser himself. Those activities were not undertaken by the seller and no corresponding amount was charged by the seller for doing anything in respect of the goods before delivery.

Conclusion: The collection, transport and crushing charges were not part of the purchase price and were not exigible to sales tax.

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