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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether freight and loading charges separately stipulated in the contract and charged over and above the ex-tannery price formed part of the taxable turnover or were deductible under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959.
Analysis: The contract fixed the price per baram ex-tannery and separately provided for lorry freight at a stated rate per cft. and loading charges per lorry. The invoices and the purchaser's confirmation showed that the freight and loading charges were agreed to be separate items and that the purchase was completed at Erode with transport at the purchaser's risk. On these facts, the charges were not part of a single composite sale price but were separate expenses falling within the rule permitting deduction. The authorities relied upon by the Revenue were distinguished on the ground that they concerned situations where freight had been included in the price or incurred before sale as a component of the price.
Conclusion: Rule 6(c) applied, and the freight and loading charges were deductible from the taxable turnover; the assessee succeeded.
Ratio Decidendi: Where freight and loading charges are separately stipulated in the contract and charged distinct from the sale price, they do not form part of the taxable turnover and are deductible under the relevant turnover rule.
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