Separately charged outward freight is deductible from taxable turnover when billed for delivery to the purchaser's site.

Separately charged transport charges for minerals carried from the pit-head to the purchaser's work site were deductible from taxable turnover under the amended sales tax scheme. The statute taxes taxable turnover after the deductions allowed from gross turnover, and the amendment reintroduced outward freight or delivery cost, when separately charged, as a deductible item. Because the freight was separately billed and related to delivery to the purchaser's site, it did not form part of the sale price and could not be included in assessable turnover. Earlier Supreme Court authorities were distinguished because they concerned freight incurred before sale or regimes where freight had a different statutory character.

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Issues: Whether the separately charged transport charges for minerals carried from the pit-head to the purchaser's work site formed part of the sale price and were includible in taxable turnover, or were deductible under the amended sales tax provisions.

Analysis: The Act levies tax on taxable turnover, which is arrived at from gross turnover after making the deductions permitted by section 5(2)(A). The amended statutory scheme removed the former exclusion of freight from the definition of sale price and reintroduced the cost of outward freight or delivery, when separately charged, as a deductible item from taxable turnover under section 5(2)(A)(a)(iii). On the facts, the freight was separately billed and related to delivery to the purchaser's site, so the statutory deduction applied. The earlier Supreme Court decisions relied upon by the assessing officer were distinguished because they dealt with freight incurred prior to sale or with statutory controls giving freight a different character.

Conclusion: The separately charged transport charges were deductible and could not be included in the assessee's assessable turnover.

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