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Issues: Whether customs duty, insurance charges and port clearance charges paid by the purchaser, but not charged by the seller, form part of the "purchase price" and consequently the "value of goods" for levy of entry tax under the U.P. Tax on Entry of Goods Act, 2000.
Analysis: The definition of "value of goods" under section 2(1)(e) of the U.P. Tax on Entry of Goods Act, 2000 refers to the purchase price as defined in section 2(gg) of the U.P. Trade Tax Act, 1948. The relevant statutory test is the amount of valuable consideration paid or payable to the seller, together with sums charged by the seller in respect of the goods before delivery, other than freight, delivery or installation charges separately charged. Amounts paid independently by the purchaser after completion of the sale, and not charged by the seller, do not fall within purchase price. Customs duty paid directly by the purchaser in the import transaction was therefore not includible in the purchase price merely because it was incident to importation.
Conclusion: Customs duty and allied charges not charged by the seller were not includible in the purchase price or the value of goods, and the entry tax demand could not be sustained. The revision by the Revenue failed.
Ratio Decidendi: For entry tax purposes, "purchase price" includes only consideration charged by or payable to the seller for the goods, and does not extend to duties or charges separately borne by the purchaser after the sale is complete.
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