Credit notes as rebates must be included in differential taxable turnover when they reduce the dealer's effective purchase price.

Credit notes issued by manufacturers to distributor-dealers were treated as rebates or discounts that reduced the effective purchase price, and that reduction had to be reflected in computing differential taxable turnover. Because the sale invoices were tax-inclusive and the record did not show that the credit-note value had already suffered tax in the hands of the first seller, the amount represented by the credit notes was required to be taken into account either by adding it to turnover or by adjusting the purchase price. On that basis, the credit-note amounts were correctly includible in the dealers' differential taxable turnover.

---

---

Issues: Whether the value represented by credit notes issued by manufacturers to distributor-dealers was liable to be included in the dealers' differential taxable turnover.

Analysis: The sale invoices showed that the sale price was inclusive of tax and other levies, and the credit notes represented rebates or discounts credited to the dealers against the purchase price. The reduction given under the credit notes therefore reduced the effective purchase price of the dealers, and correspondingly affected the computation of differential turnover. The record also did not establish that the amount represented by the credit notes had already suffered tax in the hands of the first sellers. In computing differential taxable turnover, the value of the credit notes had necessarily to be taken into account, either by adding it to the turnover or by reducing the purchase price accordingly.

Conclusion: The credit note amounts were correctly includible in the dealers' differential taxable turnover.

---