Sale price excludes indemnity or guarantee charges for transit protection where they are separate from sale consideration.

Indemnity or guarantee charges recovered from a limited class of buyers for safe transportation of goods were not part of the sale price. The charges were linked to transit protection and compensation for loss or damage during carriage, were recovered only on request, and were not shown to form part of the ex-factory price. Under section 2(h) of the Central Sales Tax Act, 1956 and section 2(p) of the Rajasthan Sales Tax Act, 1954, only amounts payable as consideration for sale and sums charged for work done in respect of goods at or before delivery can be included. As the goods were handed over to the railway authorities, freight was borne by the buyer, and the disputed charges were separate from sale consideration, they were not exigible to tax.

---

---

Issues: Whether indemnity or guarantee charges recovered from some buyers for safe transportation of goods formed part of the sale price liable to sales tax.

Analysis: The charges were recovered only from a limited class of buyers on request, were connected with transit protection and compensation for loss or damage during carriage, and were not shown to be part of the ex-factory price of the goods. Under the definition of sale price in section 2(h) of the Central Sales Tax Act, 1956 and section 2(p) of the Rajasthan Sales Tax Act, 1954, only amounts payable as consideration for sale and sums charged for work done in respect of goods at or before delivery can be included. The materials showed that the goods were handed over to the railway authorities for transport, freight was to be borne by the buyer, and the disputed charges were not part of the consideration for sale.

Conclusion: The indemnity or guarantee charges did not form part of the sale price and were not exigible to tax.

---