FOR destination pricing brings distribution charges into taxable turnover when they cover delivery-related pre-sale expenses.

Under a FOR destination pricing regime, distribution or delivery-related pre-sale expenditure forms part of taxable turnover even if separately recovered in the bill. The court found that the amounts charged per tin were not confined to freight alone but covered distribution, depot maintenance and sale-promotion expenses linked to delivery of vanaspati. On that basis, the separately recovered charges were includible in turnover for sales tax purposes, and the challenge by the assessee failed.

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Issues: Whether the distribution charges recovered separately from purchasers formed part of the taxable turnover for sales tax purposes where the controlled sale price of vanaspati was fixed on a FOR destination basis.

Analysis: The price of vanaspati was fixed under the control order on a FOR destination basis, and the distribution charges were recovered in fixed amounts per tin pursuant to that scheme. The finding was that the charges were not shown to be confined to freight alone and instead represented pre-delivery expenses, including distribution, depot maintenance, and sale promotion. Where the sale price is FOR destination, freight or delivery-related expenditure forms part of the sale price and is includible in turnover even if recovered separately. The earlier view excluding freight on separate billing did not assist the applicant because the controlling price order and the nature of the charge brought the amount within turnover.

Conclusion: The distribution charges were rightly included in the taxable turnover and the issue was decided against the assessee.

Ratio Decidendi: Under a FOR destination pricing regime, amounts recovered towards distribution or delivery-related pre-sale expenditure form part of taxable turnover, even if separately shown in the bill.

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