Freight and delivery charges excluded from sale price where separately charged and taxed only on net turnover.

Freight and delivery charges were excluded from the taxable turnover because section 2(h) of the Central Sales Tax Act, 1956 treats such charges as outside the sale price when separately charged. Although the bills first showed an aggregate figure and then deducted freight and delivery before tax computation, the factual finding was that tax was collected only on the amount net of those charges. The addition to turnover was therefore disallowed in favour of the assessee.

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Issues: Whether freight and delivery charges were includible in the taxable turnover or were excluded from the sale price under section 2(h) of the Central Sales Tax Act, 1956.

Analysis: The assessee's bills showed the freight and delivery component separately in substance, although the entries were made in an indirect manner by first showing an aggregate amount and then deducting those charges before calculating sales tax. On the facts found, the tax was collected only on the amount excluding freight and delivery charges. Section 2(h) excludes freight and delivery charges from the definition of sale price when they are charged separately.

Conclusion: The freight and delivery charges were not includible in the sale price, and the addition to turnover was correctly disallowed in favour of the assessee.

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