Dealer margin for pre-delivery inspection and after-sales service excluded from motor vehicle assessable value under post-clearance principles.

Dealer margin attributable to pre-delivery inspection and free after-sales service was treated as part of post-clearance servicing arrangements, not as an element directly linked to manufacture or marketability. The analysis followed the view that such dealer-related charges arise after the vehicles leave the factory gate and confer mutual benefit without forming part of the assessable value. On that basis, the dealer's margin, including amounts referable to pre-delivery inspection and warranty-related servicing, was held not includible in the assessable value of the motor vehicles.

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Issues: Whether the dealer's margin, including amounts attributable to pre-delivery inspection and free after-sales service, was includible in the assessable value of the motor vehicles.

Analysis: The price structure showed that the dealer's margin was part of the consideration arrangement for pre-delivery inspection and warranty-related servicing. Following the earlier Supreme Court ruling on after-sales service, and the Tribunal's own prior decisions, such dealer-related charges were treated as post-clearance activities conferring mutual benefit and not as elements having a direct nexus with manufacture or marketability. Pre-delivery inspection was also viewed as an activity subsequent to clearance from the factory gate and therefore outside assessable value.

Conclusion: The dealer's margin was not includible in the assessable value of the vehicles and the appeal succeeded.

Ratio Decidendi: Amounts forming part of the dealer's margin for pre-delivery inspection and free after-sales service, being post-clearance charges without direct nexus to manufacture or marketability, are not includible in the assessable value.

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