1979 (10) TMI 190 - SCH - VAT and Sales Tax

Whether for the purpose of determining the taxable turnover for assessment under the Central Sales Tax Act, 1956, the sale price must be computed by including the amount allowed by way of trade discount? Held that - Appeal dismissed. The assessee effected sales of goods to its dealers and allowed a trade discount on the catalogue price to cover the expenses incurred by the dealers and permit a margin of profit to them. The dealers were required to sell the goods at the catalogue price. For the assessment years 1960-61 to 1963-64, the High Court of Kerala has held that the amount allowed as trade discount could not be included in the taxable turnover as relying on Orient Paper Mills v. State of Orissa 1974 (2) TMI 67 - ORISSA HIGH COURT which is right.

Summary

The Supreme Court held that the amount allowed as trade discount cannot be included in the taxable turnover for assessment under the Central Sales Tax Act, 1956. The appeals were dismissed with costs.