9911796707
TMI Blog1995 (4) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... the full price. It was maintaining a running account of its dealers. If at the end of the month purchases made by a particular dealer from the applicant exceeded minimum qualifying level, the applicant was crediting the running account of the dealer with the incentive amount of Rs. 150 to Rs. 350 per tractor purchased. The authorities below including the Tribunal came to the conclusion that since this incentive related to the tractors and not to the sale price, the applicant was not entitled to reduce its taxable turnover by the incentive granted by it to its dealers. One of the points for consideration in these revisions is about this incentive money which comes to Rs. 6,24,230.84 for the assessment year 1982-83 (U.P.) and Rs. 2,82,042.70 for the assessment year 1983-84 (U.P.). The applicant had taken out one open insurance policy to cover those goods in transit which were required to be insured by its purchasers. The applicant was paying insurance charges to the insurance company in lump sum and was charging from the purchasers who asked for the insurance cover at 1 per cent. The authorities below included the amount of insurance premium collected by the applicant at 1 per cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivery thereof, other than cost of freight or delivery or cost of installation or the amount realised as sales tax or purchase tax, when such cost or amount is separately charged; (ii) any cash or other discount on the price allowed in respect of any sale and any amount refunded in respect of articles returned by customers shall not be included in the turnover; and (iii) where for accommodating a particular customer, a dealer obtains goods from another dealer and immediately disposes of the same without profit to the customer, the sales in respect of such goods shall be included in the turnover of the latter dealer alone;" Rule 44 relating to determination of turnover of sales framed under the Act is also material, relevant part of which reads as under: "Rule 44. Determination of turnover of sales.-The tax under section 3 and sub-section (2) of section 3-D shall be computed on the net turnover of sales. In determining the net turnover of sales, the amounts specified below shall be deducted if they are included in the gross turnover- (a) all amounts allowed as discount, provided that such discount is allowed in accordance with the regular practice of the dealer or is in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is point is concerned, is in pari materia with the provisions of the U.P. Sales Tax Act. This Court in the case of Commissioner, Sales Tax, Uttar Pradesh, Lucknow v. Indian Farmers Fertilizers Co-operative Limited [1993] 90 STC 23 has held that even if the discount is given per unit it is deductible from the total taxable turnover of an assessee because discount is given in various shapes and in various manners. It was a case of sale of fertilizers, and the assessee had given discount at Rs. 20 per metric ton on the sale of urea and at Rs. 25 per metric ton on the sale of N.P.K. grade. According to the scheme, credit memo was prepared in the name of the buyers at the end of each quarter in respect of the aforesaid discounts and instead of discount given in cash, share certificate was being issued for that sum to the purchasers. The assessee claimed that it was a case of discount which cannot be included in its taxable turnover and it was upheld by this Court. The last case on the point is another decision of this Court given by the Division Bench in the case of Shri Baidya Nath Ayurved Bhawan (P.) Ltd. v. Commissioner of Sales Tax, U.P., Lucknow [1970] 26 STC 171. It was a case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad taken out an open insurance policy. Similarly, there is no dispute that at least in some cases the goods were covered for the goods under transit which means that the insurance charges levied by the applicant were in relation to the insurance of goods got done by the applicant for covering the risk during transit on the request of its buyers. The other point involved in these revisions is in regard to material service performance security deposit and labour service performance security deposit. A customer purchasing tractors of the applicant according to the terms offered by the applicant was entitled to 9 free services and replacement of some parts which were found to have manufacturing defects. Giving of free service and replacement of such parts was the liability of dealers on behalf of the applicant. It was urged by learned counsel for the applicant that it was receiving complaints from the customers that the dealers were not giving free service and were not replacing the defective parts and therefore, in order to provide satisfactory service to the customers, the applicant devised the scheme under which it was taking the said security deposits from its dealers in re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
