JUDGMENT : Mohammed Nias C.P., J. The Kerala State Electricity Board Limited (for short “Board”) has filed this appeal challenging Annexure-C 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, Ko thamang alam, for the manufacture and supply of electrical poles. 2. Board contends that it had invited tenderers for the purchase of Prestressed concrete poles (for short “PSC poles”), and Annexure-A purchase order contains the basic price, transportation charges, taxes, and duties, and in all the invoices they are separately shown as is evident from Annexure-B and therefore, except the sale price other components do not form part of the same price and therefore, determining the taxable turn including those charges other than the basic price was illegal going by the provisions of the KVAT Act. Initially, the manufacturers filed their monthly returns showing only the price of the poles while computing the taxable turnover, which the department accepted but later on, due to the audit objection, the department sought to levy tax on the freight charges also, which led to one of the manufacturers seeking a clarification. On the basis of the above contentions, the following substantial questions of law have been framed:- 1. Has not the authority for clarification committed an error in holding that the assessee is not entitled to deduct transportation charges, loading, unloading charges etc. From the total turnover while computing taxable turnover ? 2. Whether in the facts and circumstances of the case, the respondent went wrong in applying the dictum in India Meters Limited Vs. State of Tamil Nadu [ (2010) 9 SCC 423 in the case of the assessee ? 3. Whether in the facts and circumstances of the case, the respondent ought to have held that the basic price as shown in Annexures A and B alone formed taxable turnover of the assessee in view of the provision contained in Rule 10 (e) of the Kerala Value Added Tax Rules ? 3. The learned Senior Counsel Sri. 3. Whether in the facts and circumstances of the case, the respondent ought to have held that the basic price as shown in Annexures A and B alone formed taxable turnover of the assessee in view of the provision contained in Rule 10 (e) of the Kerala Value Added Tax Rules ? 3. The learned Senior Counsel Sri. Raju Joseph appearing for the appellant, contended that going by the clauses in Annexure-A purchase order and Annexure B invoice, it is clear that the sale was complete at the factory gate and that the transportation, unloading stacking, etc., are not part of the sale consideration. Thus, going by 10 (e) of the Kerala Value Added Tax Rules, freight and charges for delivery are specifically excluded while determining taxable turnover, and as the invoice shows these items separately, freight and charges for delivery ought to have excluded from the taxable turnover. His further submission is that the decision of the Supreme Court in India Meters Limited v. State of Tamil Nadu [ (2010) 9 SCC 423 ] is clearly distinguishable as the factual situation was different. It is also his argument that the terms of the agreement determine whether the sale consideration included the transportation, unloading, and other charges, and it cannot be said that in every case, transportation or freight charges will be included as the sale price. 4. On the other hand, the learned counsel for the Revenue, Smt. Jasmine submitted that the Clauses in the contract clearly show that the charges for freight was included in the sale price. It is also argued that the definition of turnover, sale, and sale price occurring in the KVAT Act read with Annexures A and B clearly shows that the same form part of the taxable turnover and the fact that the charges were shown separately would make no difference in the instant case. 5. We have heard the learned counsel on either side and perused the documents on record. 6. Annexure A, the purchase order specified the price details fixed, including taxes, excise duty, other levies, freight, insurance, loading, and unloading at the site. It also contained a clause that insists that all the materials that are ordered will have to be fully insured from the time of despatch from the manufacturer to the destination station, including one month's storage, thereafter at the cost of the contractor. It also contained a clause that insists that all the materials that are ordered will have to be fully insured from the time of despatch from the manufacturer to the destination station, including one month's storage, thereafter at the cost of the contractor. In the clause dealing with price variation, the effect of variation in the transporting charges factoring the price of diesel was also provided. These clauses, according to us, read singularly or together would clinchingly show that the cost of freight/transportation was included in the sale price and that the sale cannot be said to be complete at the factory gate. There are conditions to be met by the manufacturer even after the supply of the pole at the place specified by the appellant. 7. The learned Senior Counsel vehemently argued that since the charges were shown separately, the cost of freight/transportation must be treated as excluded from the sale consideration. A similar contention was considered by the Supreme Court in Hindustan Sugar Mills v. State of Rajasthan & Others [ (1978) 4 SCC 271 ] wherein the Apex Court held as follows : 3. Where a dealer transports goods from his factory to his place of business and sells them at a price which is arrived at after taking into account “freight and handling charges” incurred by him in transporting the goods, the amount of “freight and handling charges”, included in the price would be part of the “sale price” because, it would be payable by the purchaser to the dealer as part of the consideration for the sale of the goods. The same would be the legal position even if the “freight and handling charges” are shown separately in the bill and added to the price of the goods, for the character of the payment would remain the same. Since 'freight and handling charges' represent expenditure incurred by the dealer in making the goods available to the purchaser at the place of sale, they would constitute an addition to the cost of the goods to the dealer and would clearly be a component of the price charged to the purchaser. Thus, it is clear that a mere bifurcation of the charges in the invoices will not come to the aid of the appellant, going by the principles laid down in the above judgment. 8. Thus, it is clear that a mere bifurcation of the charges in the invoices will not come to the aid of the appellant, going by the principles laid down in the above judgment. 8. The learned Senior counsel argued relying on Rule 10 (e) of the Kerala Value Added Tax rules, that the freight and the charges for delivery ought to have been excluded. The said rule is reproduced hereunder; 10. Determination of taxable turnover:-(1) In determining the taxable turnover, the amounts specified in the following clauses shall, subject to the conditions specified therein, be deducted from the total turnover of the dealer. xxxxx xxxxxxx (e) all amounts falling under the following heads, when specified and charged for by the dealer separately, without including them in the price of goods sold: 1. freight 2. charges for delivery 3. cost of installation” A reading of the above clearly shows that the amounts specified and charged for by the dealer separately without including them in the price of goods sold are alone excluded. (emphasis supplied). This rule is not intended to exclude from the taxable turnover any component of the price/expenditure incurred by the dealer before the sale and to make the goods available to the intending customer at the place of sale. In the instant case, we have already held that the freight and transportation charges are part of the sale consideration being incidental to the sale, and as such, 10 (e) of the KVAT Rules, 2005 which excludes those charges when they are not included in the price of the goods sold has no application in the instant case. 9. That apart, the definition of the sale price in the KVAT Act, is relevant which reads as follows : 2 (xliv) "sale price" means the amount of valuable consideration received or receivable by a dealer for the sale of any goods less any sum allowed as cash discount, according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods or services at the time of or before delivery thereof, excise duty, special excise duty or any other duty or taxes except the tax imposed under this Act. 10. The definitions of total and taxable turnover are also extracted here. 10. The definitions of total and taxable turnover are also extracted here. “2 (li) "total turnover" means the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable to tax, including the turnover of purchase or sale in the course of inter-State trade or commerce or in the course of export of the goods out of the territory of India or in the course of import of goods into the territory of India; 2 (l) "taxable turnover" means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed”. These definitions in the Act, coupled with the terms of the contract also makes it crystal clear that the cost of transportation/loading and unloading and delivery, etc are included in the sale price. 11. All the judgments which dealt with Rule 9(f) of the Kerala General Sales Tax Act and Rules and Rule 6 (c) of the Tamil Nadu General Sales Act and Rules Act, both of which are pari materia to Rule 10 (e) of KVAT Rules held that the amounts paid by way of consideration by the purchaser to the seller of goods in pursuance of the contract of sale could legitimately be regarded as purchase price while calculating the turnover for the purposes of sales tax legislation. All the payments should have been made pursuant to the contract of sale and not dehors it. In other words, all charges till the passing of the title to the goods are liable to be included in the sale consideration. 12. As we have already held, the clauses in Annexures 1 and 2 clearly show that the transfer of title to the goods would take place only on delivery of goods at the customer's place and the customer's obligation to effect payment would arise only after the delivery is effected. 12. As we have already held, the clauses in Annexures 1 and 2 clearly show that the transfer of title to the goods would take place only on delivery of goods at the customer's place and the customer's obligation to effect payment would arise only after the delivery is effected. We are also mindful of the provisions of Chapter 3 of the Sale of Goods Act, in particular, section 22 that applies where the contract of sale of specific goods in a deliverable state, including the conditions to do such acts with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done. 13. The law applicable has again been re-iterated in India Meters Limited (Supra) as hereunder : 18. 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 discussions above would lead to the irresistible conclusion that Annexure – C order of clarification calls for no interference, and the OT appeal is without merit, and the same is, accordingly, dismissed.