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2016 (9) TMI 1221 - GUJARAT HIGH COURTPre-sale inspection charges - works contract for supply and installation of machinery - Gujarat Sales Tax Act - export sale - assessee had a taxable turnover of ₹ 25.57 crores (rounded off) which included a sum of ₹ 3.71 lacs (rounded off) towards performance test/inspection charges - such tests carried out in the premises of the assessee's factory itself by a third party agency and were pre-sale tests - “sale price” as defined under section 2(29) of the Act - whether on the facts and in the circumstances of the case, the tribunal has rightly held that, the appellant cannot levy tax on performance test/inspection of goods as the same is not the part of sale price? - Held that: - The pre-sale inspection or performance testing though was done at the site of the factory of the assessee, it was being done at the instance of the purchaser for which the purchaser had separately paid and the inspection was being carried out by third party agency. Though the terms of the contract also referred to inspection as part of the sale consideration, the same when appreciated in connection with other conditions would show that such inspection was after installation inspection and did not refer to presale inspection - the test performed for the inspection was neither done by the assessee nor was charged by the assessee and would therefore not be included in the expression “any some charged for anything done by the dealer in respect of the goods.” as defined in section 2(29) of the act. Set off on packing materials used for delivery of the product - Section 44 of the Gujarat Sales Tax Rules, 1970 - the decision in the case of Rajsheel Ltd. v/s State of Andhra Pradesh [1989 (5) TMI 292 - SUPREME COURT OF INDIA] has been referred where it was held that the seller did not intend to sell the packing separately and was therefore not entitled to set off under Rule 44 of the Gujarat Sales Tax Rules. - Held that: - when there is no independent sale of packing material but the value of the packing material goes into determining the value of the goods sold, the deeming fiction provided under Section 6(C) of the said Act would apply and even the value component of packing material would be taxed at the same rate as the goods themselves. Even on the other hand, on facts it is found that the packing material is sold separately from the sale of goods, the rate of tax on such packing material would be one prescribed for such packing material. In either case, there would be a sale of packing material either as a integrated part of the sale of principal goods or separately. As noted, Rule 44 of the Sales Tax Rules, 1970 envisages the drawback, set off, or refund of tax at prescribed rates of purchase of goods sold in course of intra-state trade etc - All such conditions are satisfied - rightly held by the Tribunal that the set off would be available. Appeal dismissed - decided against Revenue.
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