Notional interest on buyer advances excluded from assessable value where no additional consideration was proved.

Notional interest on advances received from buyers is includible in assessable value only if the advance or deposit depresses the sale price or if there is additional consideration over and above the sale price for the goods. On the facts found, no such additional consideration was established, and the Board circular placed the burden on the department to prove it. The earlier view shifting that burden to the assessee was treated as no longer good law in light of the Supreme Court ruling relied upon by the Tribunal. Notional interest was therefore held not includible in assessable value, and the appeals failed.

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Issues: Whether notional interest on advances received from buyers is includible in the assessable value of the goods.

Analysis: Includibility of notional interest depends on whether the advance or deposit has depressed the price or whether any additional consideration, over and above the sale price, exists for the sale of the goods. On the facts found, no such additional consideration was shown. The Board circular also stated that it is for the department to establish the existence of such additional consideration. The earlier Tribunal view shifting the burden to the assessee was no longer good law in view of the Supreme Court ruling relied upon by the Tribunal.

Conclusion: Notional interest on the advances was not includible in the assessable value, and the appeals failed.

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