Packing charges exemption covers packing materials as well as labour under sales tax rules, reducing taxable turnover.

Packing charges shown separately in cement sales were held exempt from taxable turnover under rule 9(f)(ii) of the Kerala General Sales Tax Rules, 1963. The expression "charges for packing" was construed in its ordinary sense and was found broad enough to cover not only labour or service elements but also the cost of packing materials such as gunny bags. Because the packing charge was separately identified in the bill structure, the assessment could not include that component in turnover, and the tax levied on those charges was set aside in favour of the assessee.

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Issues: Whether packing charges separately shown in the bills for sale of cement were exempt from inclusion in taxable turnover under rule 9(f)(ii) of the Kerala General Sales Tax Rules, 1963, and whether the expression "charges for packing" included the cost of packing materials.

Analysis: The sale was of cement packed in gunny bags, with packing charges shown separately, and the price structure under the Cement Control Order treated packing as a distinct charge. The words "charges for packing" in rule 9(f)(ii) were construed in their ordinary sense. On that construction, the expression was held wide enough to include not merely labour charges for packing but also the cost of the packing materials used. The contrary view that only service or labour cost was covered was not accepted.

Conclusion: The packing charges, including the cost of packing materials, were entitled to exemption under rule 9(f)(ii), and the assessment to that extent was unsustainable and liable to be set aside in favour of the assessee.

Final Conclusion: The petition succeeded, and the tax assessed on the packing charges was deleted from the turnover for the relevant years.

Ratio Decidendi: The expression "charges for packing" in a sales tax exemption rule includes the cost of packing materials as well as the labour element, unless the rule clearly indicates a narrower meaning.

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