Third-party reimbursement under a promotional scheme does not form sale price where the sale is complete at the agreed price.

Amounts reimbursed by a manufacturer under a promotional financing arrangement do not form part of sale price where the sale between distributor and retailer is complete at the agreed price and the payment is received from a third party, not from the purchaser as consideration for the goods. The Court held that such reimbursement was outside the statutory concept of sale price under section 2(o) of the M.P. General Sales Tax Act, 1958, and the Tribunal was correct in excluding it from taxable turnover.

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Issues: Whether the amount reimbursed by the manufacturer to the distributor formed part of the sale price under section 2(o) of the M.P. General Sales Tax Act, 1958.

Analysis: The transaction between the distributor and the retailer was complete at the agreed price at which the timepieces were sold to the retailer. The reimbursement of fifty per cent of the cost by the manufacturer was an amount received from a person other than the purchaser and was part of the financing arrangement under the gift scheme, not an additional price paid by the retailer. As the amount was received by way of reimbursement from the principals, it did not answer the statutory concept of sale price as consideration payable by the purchaser for the goods.

Conclusion: The reimbursement of Rs. 33,263 did not form part of the sale price under section 2(o), and the Tribunal was right in excluding it from taxable turnover.

Final Conclusion: The reference was answered in favour of the assessee, and the addition of the reimbursed amount to turnover was not sustained.

Ratio Decidendi: Amounts reimbursed by a third party under a promotional arrangement do not constitute sale price where the sale between dealer and purchaser is complete at the agreed price and the amount is not paid by the purchaser as consideration for the goods.

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