Sale in course of import requires an integral nexus between contract and import, shielding the transaction from sales tax.

A sale is treated as occurring in the course of import where the contract of sale and the import are so integrally linked that the goods are imported pursuant to that contract and cannot be diverted without breaching it. Here, the importer held the import licence and undertook to import the marine engine exclusively for the purchaser under the agreement. Because the import was occasioned by the contract and the transaction satisfied the required direct nexus between sale and import, the sale was held not exigible to sales tax under section 5(2).

---

---

Issues: Whether the sale of the marine engine was a sale in the course of import and therefore exempt from sales tax under section 5(2) of the General Sales Tax Act.

Analysis: The contract of sale and the import were found to be inseparably linked. The importer held the import licence and undertook to import the engine only for the purchaser under the terms of the agreement. The goods were imported pursuant to that contract, and any diversion of the engine to another buyer would have constituted a breach of the agreement. Applying the principles governing sales in the course of import, the transaction was held to have occasioned the import and to satisfy the requirement of an integral connection between sale and import.

Conclusion: The sale was in the course of import and was not exigible to sales tax, so the assessee succeeded on the issue.

Ratio Decidendi: A sale is in the course of import when the contract of sale and the import are so integrally connected that the goods are imported pursuant to the contract and cannot be diverted without breaching it.

---