Service discount under a special agreement remained deductible even when settled after sale and monthly billing consolidation.

Service discount granted under a special agreement remained deductible from turnover and taxable turnover where it was allowed under the dealer's contract and the accounts showed that the purchaser paid only the original price less discount. Rule 9(a) permitted deduction of discounts given according to regular practice or a specific agreement, and the statutory scheme did not require the discount to be paid contemporaneously with the sale. Later monthly consolidation of bills and post-sale settlement did not defeat deductibility, so the claimed exemption was available.

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Issues: Whether service discount granted under a special agreement and paid after the sale, at the end of the month when bills were consolidated, was deductible from turnover and taxable turnover under the sales tax law.

Analysis: The definition of turnover excluded cash or other discounts allowed on the price in respect of a sale, and the definition of taxable turnover permitted deductions in the manner prescribed. Rule 9(a) allowed deduction of discounts if they were granted according to the regular practice of the dealer or under a contract or agreement in a particular case, and if the accounts showed that the purchaser had paid only the amount originally charged less the discount. The facts found by the Tribunal satisfied these requirements. The statutory language did not require the discount to be paid contemporaneously with the sale, and the later settlement of the discount did not alter its deductibility.

Conclusion: The service discount was deductible, and the assessee was entitled to the exemption claimed.

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