Export turnover and total turnover cannot both include foreign branch receipts when overseas branches are treated as distinct persons.

Overseas branches were treated as distinct persons from the taxable-territory establishment, so services provided and billed by those foreign branches to foreign recipients, with consideration received abroad, were regarded as branch turnover outside the appellant's export turnover. On the same reasoning, that turnover could not be added to the appellant's total turnover either, because the department could not treat the same branch receipts as non-export for one purpose and include them for another. The assessee therefore succeeded on the turnover inclusion issue.

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Issues: Whether the turnover relating to services provided by the appellant's overseas branches to foreign recipients was includible in the appellant's export turnover or total turnover.

Analysis: The overseas branches were treated as distinct persons because an establishment in non-taxable territory and an establishment in taxable territory are distinct under the statutory scheme. The services were provided and billed by the foreign branches to foreign recipients, and the consideration was received by those branches. On that footing, the branches themselves were the locations of service provision and the turnover generated by them could not be treated as the appellant's export turnover. The same reasoning also barred inclusion of that value in the appellant's total turnover, because the department could not treat the same branch turnover as non-export for one purpose and yet add it to the assessee's turnover for another purpose.

Conclusion: The overseas branch turnover was neither includible in the appellant's export turnover nor in its total turnover, and the assessee succeeded on this issue.

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