Turnover deduction for embassy-supplied goods allowed where official-use and exemption certificates satisfied the rule

Sale price of goods supplied to the American Peace Corps was deductible from gross turnover because embassy certificates showed the Peace Corps was an agency of the U.S. Government, part of the Embassy, and exempt from sales tax, while a further certificate confirmed official use by the Embassy. On those documents, the conditions for deduction under Rule 29(ii)(a) of the Delhi Sales Tax Rules, 1951 were satisfied, and the assessee was entitled to exclude the sale value from turnover.

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Issues: Whether the sale price of goods supplied to the American Peace Corps was deductible from the appellant's gross turnover under Rule 29(ii)(a) of the Delhi Sales Tax Rules, 1951.

Analysis: The appellant produced certificates from the United States Embassy stating that the Peace Corps was an agency of the U.S. Government, part of the Embassy, and exempt from sales tax under the relevant notification. A further exemption certificate showed that the goods purchased were for official use of the Embassy. On these documents, the claim satisfied the condition for deduction under the rule.

Conclusion: The appellant was entitled to deduct the sale value from its turnover under Rule 29(ii)(a).

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