Container rent excluded from turnover; equalised freight deductible only up to actual average freight basis

Amounts recovered as rent for bottles or containers are not includible in sale price or turnover where there is no sale of the containers, so that component was deleted. Equalised freight may be deducted from turnover only to the extent it reflects the actual average freight; if the charged amount exceeds that average, deduction cannot go beyond the actual freight basis. On the freight question, the matter was remanded for fresh determination because the record was insufficient to fix the correct average freight and consequential deduction.

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Issues: (i) Whether the rent received for bottles or containers was includible in the sale price or turnover. (ii) Whether the freight charged on an equalised basis was deductible from turnover and, if so, on what basis the deduction was to be worked out.

Issue (i): Whether the rent received for bottles or containers was includible in the sale price or turnover.

Analysis: The amount described as rent for bottles represented consideration for containers and not sale consideration for the containers themselves. Since there was no sale of the containers, the amount could not form part of the sale price or turnover.

Conclusion: The inclusion of the rent of bottles or containers in turnover was unsustainable and was deleted.

Issue (ii): Whether the freight charged on an equalised basis was deductible from turnover and, if so, on what basis the deduction was to be worked out.

Analysis: Where freight is not separately charged on each consignment but is recovered as equalised freight, deduction can be allowed only to the extent that such freight bears a relation to the average actual freight. If there is a substantial discrepancy between actual average freight and the amount charged as equalised freight, deduction cannot exceed the actual average freight. The material on record was insufficient to determine the correct figure, so fresh consideration was necessary.

Conclusion: The freight issue was remanded to the Tribunal for fresh determination of the actual average freight and consequential deduction.

Final Conclusion: The revision succeeded in part, with deletion of the container rent addition and remand of the freight question for fresh decision.

Ratio Decidendi: Amounts recovered as container rent are not part of sale price absent a sale of the containers, and equalised freight is deductible from turnover only to the extent it reflects the actual average freight.

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