Freight charges under a buyer-borne delivery contract do not form part of sale price when contract terms control the invoice.

Freight charges paid by the buyer did not form part of the sale price where the contract terms showed delivery was complete on handing the goods to the carrier, the goods then remained at the purchaser's risk, and freight at destination was borne by the purchaser with an allowance reflected in the invoice. The invoice form was not decisive; the true contractual terms controlled. The arrangement was therefore not treated as an f.o.r. destination sale so as to include freight in the consideration. The discussion also distinguished later cement cases because they depended on a statutory control order with overriding effect, which was absent here.

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Issues: Whether freight charges paid by the buyer and deducted from the invoice formed part of the sale price in a contract described as f.o.r. destination.

Analysis: The decisive factor was the true terms of the contract and not the invoice form. The price lists and forwarding terms showed that delivery was complete when the goods were handed over to the carrier, the goods thereafter remained at the purchaser's risk, and the purchaser was responsible for freight at destination, with allowance made in the invoice. On those terms, the arrangement was not a contract of sale f.o.r. destination railway station so as to make freight part of the consideration. The earlier Supreme Court ruling on similar contractual terms applied, while the later cement cases turned on a statutory control order having overriding effect, which was absent here.

Conclusion: Freight charges paid by the buyer did not form part of the sale price, and the question was answered in favour of the assessee.

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