ALL CHARGES TILL THE PASSING OF THE TITLE TO THE GOODS ARE LIABLE TO BE INCLUDED IN THE SALE CONSIDERATION : KERALA HIGH COURT
The High Court of Kerala passed a judgement on 1 March, 2023 which stated that all charges till the passing of the title to the goods are liable to be included in the sale consideration.. It was stated in the case of Kerala State Electricity Board vs The Authority For Clarification(O.T. Appeal No. 06 of 2017) which was passed by the division bench comprising of JUSTICE A.K.JAYASANKARAN NAMBIAR and JUSTICE MOHAMMED NIAS C.P.
FACTS OF THE CASE:
The Kerala State Electricity Board Limited had filed this appeal challenging an order of the authority for clarification under Section 94 of the Kerala Value Added Tax Act, 2003, that held the charges incurred for loading, unloading, stacking, and transportation formed part of the taxable turnover in the contract entered into between the appellant and M/s. Kothamangalam Aggregates, Kothamangalam, for the manufacture and supply of electrical poles.
JUDGEMENT OF THE CASE
When the transfer of the property or the goods is to be at the place of the buyer to which the seller is under an obligation to transport the goods, the expenditure incurred by the seller on freight in order to carry the goods from his place of manufacture to the place at which he is required under the contract to deliver, would thus become part of the amount for which the goods are sold by the seller to the buyer and would fall within the scope of “turnover”. The order of clarification called for no interference, and the OT appeal was without merit, and dismissed.
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JUDGEMENT REVIEWED BY ROSHNI SABU, KERALA LAW ACADEMY LAW COLLEGE.