Freight included in sale price when seller must deliver at destination and cannot prove separate buyer-borne freight.

Freight formed part of the sale price where the contract required the seller to deliver diesel at the Railways' destination and to bear transit responsibility. Under the statutory definition, freight is excluded only if it is incurred for or on behalf of the buyer and is separately charged in the invoice. As the seller failed to prove separate reimbursement or separate incidence of freight by the Railways, the delivery charges and transportation cost remained part of the price build-up. Freight was therefore includible in the sale price and taxable turnover, and the assessee's challenge failed.

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Issues: Whether road freight for diesel delivered to the Railways was includible in the sale price and taxable turnover under Section 2(36) of the Rajasthan Value Added Tax Act, 2003.

Analysis: The contract and rate terms showed that the supplier was required to deliver the goods at the destination and remain responsible for transit risk, with delivery charges and freight forming part of the price build-up. Section 2(36) excludes freight from sale price only where, according to the contract, such freight is incurred for or on behalf of the buyer and is charged separately in the invoice. The assessee did not produce convincing evidence that the freight was separately borne or reimbursed by the Railways. On the contrary, the terms indicated that freight and related delivery charges were part of the amount recoverable by the assessee for transportation up to delivery.

Conclusion: Freight was includible in the sale price and taxable turnover, and the challenge by the assessee failed.

Ratio Decidendi: Where the seller is contractually bound to deliver goods at the buyer's destination and fails to prove that freight was separately incurred for or on behalf of the buyer and separately charged, freight forms part of the sale price under the statutory definition.

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