Optional service and warranty charges excluded from sale price where levied only on customer choice and not as part of sale bargain.

Optional service and warranty charges collected only when customers chose additional cover were not part of the bargain of sale and therefore did not form part of the sale price exigible to sales tax. The factual finding that such charges were not universally levied showed they were separate from the price of the refrigerators sold, so they were excluded from turnover.

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Issues: Whether optional service and warranty charges collected at the time of sale of refrigerators formed part of the sale price and were liable to sales tax.

Analysis: The record showed a factual finding that the charges were not universal but were levied only where customers opted for the additional service or warranty, with a substantial number of transactions not attracting such charges. On that footing, the charges were not an integral component of the price of the goods sold. Once the charges were found to be optional, they fell outside the sale price exigible to tax, consistent with the applicable legal position previously recognised by the Court.

Conclusion: The optional service and warranty charges were not includible in the sale price and were not taxable as part of the turnover.

Ratio Decidendi: Charges collected for optional after-sales service or warranty, when not universally levied as part of the bargain of sale, do not constitute sale price for sales tax purposes.

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