Optional post-sale service charges for warranty repairs were excluded from turnover under the U.P. Trade Tax Act.

Optional service charges collected for maintenance and repairs of refrigerators after expiry of the one-year warranty were held not to form part of turnover under the U.P. Trade Tax Act. The definition of turnover covers amounts charged for work done by the dealer in respect of goods sold at or before delivery, but these charges related to a separate post-sale arrangement rendered only after delivery. Because the service scheme was optional and the charges were not part of the sale price, they were excluded from turnover. The revisions were therefore rejected.

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Issues: Whether optional service charges collected for maintenance and repairs of refrigerators for four years after expiry of the one-year warranty were includible in turnover under the U.P. Trade Tax Act.

Analysis: The definition of turnover under Section 2(i) of the U.P. Trade Tax Act includes amounts charged for anything done by the dealer in respect of goods sold at the time of or before delivery. The service charges in question were collected only for maintenance and repairs to be rendered after delivery, during the post-sale period, and not as part of the sale price. The finding that the scheme was optional and that the charges related to a separate post-sale arrangement was supported by the record and by the cited authorities dealing with similar warranty-service charges.

Conclusion: The optional post-sale service charges were not includible in turnover; the revisions failed.

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