Invoice interest for delayed payment forms part of sale consideration and is includible in taxable turnover.

Interest stipulated in sale invoices for delayed payment was treated as part of the sale consideration, because there was no separate agreement creating an independent post-sale charge. The Madras High Court noted that, under Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959, taxable turnover includes the aggregate amount for which goods are sold, including consideration received for deferred payment. On those facts, the interest collected for belated payment was linked to the same contract of sale and was therefore includible in taxable turnover and liable to sales tax.

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Issues: Whether interest collected for belated payment of the sale price formed part of the taxable turnover and was liable to sales tax.

Analysis: The sales were made and goods were delivered under invoices which themselves contemplated interest for delayed payment. There was no independent agreement for interest, and the payment obligation was part of the same contract of sale. Under Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959, taxable turnover comprises the aggregate amount for which goods are sold, including consideration received for deferred payment. On these facts, the interest received for delayed payment was linked to the sale consideration and could not be treated as a separate post-sale transaction.

Conclusion: The interest collected for belated payment was rightly included in the taxable turnover. The issue was decided against the assessee and in favour of the Revenue.

Ratio Decidendi: Where the invoice itself stipulates interest for delayed payment and there is no independent agreement, such interest forms part of the consideration for sale and is includible in taxable turnover.

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