Third-party commission collected as agent does not form part of sale price or taxable turnover.

Amounts collected by a seller merely as a conduit for a third party do not form part of sale price or taxable turnover where they are payable to that third party for services rendered and are not received by the seller on its own account. Here, the State Federation commission was collected only at the instance of the State Federations, credited to their accounts and remitted to them, so it was treated as a collecting agent's receipt rather than consideration for the sale. The commission was therefore outside taxable turnover under the Bombay Sales Tax Act, 1959 and the Central Sales Tax Act, 1956.

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Issues: Whether the amount recovered as State Federation commission, collected by the assessee along with the price of goods on behalf of the State Federations, formed part of the sale price and was includible in the taxable turnover under section 2(29) of the Bombay Sales Tax Act, 1959 and section 2(h) of the Central Sales Tax Act, 1956.

Analysis: The commission was payable by the purchasing consumer societies to the State Federations for services rendered by them. The assessee collected the amount only at the instance of the State Federations, credited it to their accounts, and remitted it to them. The amount was therefore not received by the assessee on its own account and did not represent consideration for the sale of goods. It was collected merely as a matter of convenience and the assessee functioned only as a collecting agent or conduit for the State Federations.

Conclusion: The amount of State Federation commission did not form part of the sale price or taxable turnover under either Act and was not includible in the assessee's turnover.

Final Conclusion: The references were answered in favour of the assessee and against inclusion of the commission amounts in taxable turnover.

Ratio Decidendi: Amounts collected by a seller merely as an agent on behalf of a third party, where they are payable to that third party and do not constitute consideration for the sale, are outside the scope of sale price and taxable turnover.

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