Separate service charges on timber sales are outside taxable turnover when billed for inspection and selection services.

Separately billed lot cooly charges collected by timber dealers for services enabling customers to inspect, select and choose timber were held not to form part of taxable turnover under explanation (2)(ii) to section 2(r) of the Madras General Sales Tax Act, 1959. The statutory concept of turnover was confined to consideration for the transfer of property in goods, so only amounts charged for something done by the dealer in respect of the goods sold, with a sufficient nexus to the sale, could be included. Charges for services de hors the sale were distinguished from price components, and the earlier timber-depot principle was treated as unaffected by the later freight-and-handling ruling.

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Issues: Whether the "lot cooly charges" collected from customers by timber dealers form part of the taxable turnover under explanation (2)(ii) to section 2(r) of the Madras General Sales Tax Act, 1959.

Analysis: The charge was held to be separately shown in the bills and was collected for services rendered by the "lot men" in enabling customers to inspect, select, and choose the timber from the stock. The statutory explanation was construed in the context of turnover as the aggregate consideration for the transfer of property in goods, so only sums charged for something done by the dealer in respect of the goods sold, with sufficient nexus to the sale, could be included. The court distinguished charges that are part of the price from amounts collected for services de hors the sale, and held that the principle in the earlier timber-depot decision was not displaced by the later freight-and-handling ruling.

Conclusion: The "lot cooly charges" do not form part of the turnover and are not taxable as part of the sale price.

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