Pre-delivery charges form part of turnover where they are part of the consideration for effective delivery of goods.

Charges for service, market fee, commission, labour, bardana and similar pre-delivery expenses were treated as part of the consideration for the goods because section 2(i) of the Punjab General Sales Tax Act, 1948 covered sums charged for anything done by the dealer in respect of the goods at or before delivery. The pre-delivery activities, including packing, stitching, labour and carriage, were therefore included in purchase turnover for sales tax purposes, and the disputed expenses were held taxable as part of turnover.

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Issues: Whether the expenses incurred for service charges, market fee, commission, labour charges, bardana and allied charges before delivery formed part of the purchase turnover and were liable to be included in turnover for sales tax purposes.

Analysis: The expression "turnover" under section 2(i) of the Punjab General Sales Tax Act, 1948 was applied to include any sum charged for anything done by the dealer in respect of the goods at the time of or before delivery. On the facts, the charges incurred for packing, stitching, labour, carriage and similar pre-delivery activities were treated as part of the consideration necessary for effective delivery of the goods. The earlier appellate findings and the tribunal order had already treated such pre-delivery charges as part of the bill and, therefore, part of the consideration.

Conclusion: The disputed expenses formed part of the turnover and were includible in the taxable purchase turnover; the issue is decided against the assessee and in favour of the Revenue.

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