The Bombay High Court ruled in favor of Parle Products Ltd, concluding that the company is not liable to pay sales tax on freight charges reimbursed by its wholesalers. The court determined these charges were a separate reimbursement and did not constitute a part of the ‘sale price’ under the Bombay Sales Tax Act, 1959. This decision overturned the initial assessment for the years 1990 to 1995, where the freight was included in Parle’s taxable turnover. The court found that the contracts clearly established an ex-factory delivery model, supporting Parle’s argument that they were acting as an agent for the purchasers when paying for freight. The ruling against the revenue department upheld Parle’s long-standing position on this matter.
Source: taxscan.in
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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