Freight included in sale price where contract made seller responsible for delivery and transport costs in taxable turnover

Freight charges for road transport of dolomite were held to form part of the sale price where the contract was for door-delivery supply on a landed-cost basis and the seller undertook transportation, loading, unloading and stacking. Because freight was built into the contractual price and payable with the bills, it was not a separate post-sale charge and could not be excluded from taxable turnover as separately charged freight. The reassessment was also sustained because the original assessment had not examined inclusion of freight in taxable turnover.

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Issues: Whether freight charges for road transport of dolomite, though shown separately, formed part of the sale price and were includible in taxable turnover.

Analysis: The agreement expressly treated the transaction as door-delivery supply on landed-cost basis and included freight by road in the price break-up. The contract made the seller responsible for transportation, loading, unloading, and stacking, and provided that freight was payable along with the bills. In such a setting, the freight was not a separate post-sale charge but a component of the consideration for the sale. The exclusion for separately charged freight could not be invoked where the freight had already been built into the price under the contract. The reassessment was also sustainable because the original assessment had not addressed inclusion of freight in the taxable turnover.

Conclusion: Freight charges formed part of the sale price and were correctly included in taxable turnover; the challenge to the reassessment failed.

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