Special rebate on sale price deductible from turnover where only the net amount was actually realised.

A special rebate on cement sales, shown separately in the invoice and actually leaving the seller with only the net sale price, was deductible from turnover under the Tamil Nadu General Sales Tax Act and Rules. Cash or other discount allowed on the price does not form part of turnover under section 2(r) read with the relevant explanation, and Rule 5-A(a) permits deduction where the discount is granted in accordance with regular practice or contract and the accounts reflect only the net amount realised. Collection of sales tax on the gross figure did not make the rebate taxable turnover.

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Issues: Whether the special rebate granted on sale of cement was deductible from turnover under the Tamil Nadu General Sales Tax Act, 1959 and the Tamil Nadu General Sales Tax Rules, 1959.

Analysis: The rebate was shown separately in the invoice and the price actually realised was the net amount after allowing the rebate. Under section 2(r) of the Act, read with clause (iii) of explanation (2), cash or other discount allowed on the price does not form part of turnover. Rule 5-A(a) likewise permits deduction of discount where it is allowed in accordance with regular practice or contract and the accounts show that the purchaser paid only the sum originally charged less the discount. The bill and surrounding circumstances showed that the assessee did not receive more than the net sale price, and the fact that sales tax had been collected on the gross figure did not make the rebate taxable turnover.

Conclusion: The special rebate was an allowable deduction and was not includible in the assessee's turnover.

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