Sale [Section 2(24)]
“Sale” means a sale of goods made within the state for cash or deferred payment or
other valuable consideration. But it does not include a mortgage, hypothecation,
charge or pledge.
A sale within the State includes a sale determined to be inside the State in accordance
with the principles formulated in section 4 of the Central Sales Tax Act, 1956.
The following show the important aspects of this definition:
(a) A sale must involve two separate parties.
(b) There must be an agreement, whether express or implied, written or verbal,
between such two parties.
(c) Such agreement should be for transfer of property in goods from one party to
another. (Hence, sale of land or building is not liable to tax.)
(d) Such transfer should be for a valuable consideration (i.e. price), which may be
paid immediately (cash sale) or settled later (credit sale). Hence, goods given
as gifts cannot be considered as sale.
Even if any one of the above features is not present, the transaction cannot be called
a ‘sale’.
Following transactions are also treated as sales :
(a) The transfer of property in goods (whether as goods or in some other form)
involved in the execution of a works contract, including an agreement for
building, construction, manufacture, processing, fabrication, erection,
installation, fitting out, repair etc. of any movable or immovable property.
(b) Delivery of goods on hire purchase or payment by installment.
(c) Supply of food, drinks (intoxicating as well as non-intoxicating) and other
articles in hotels and eating – houses
(d) Transfer of goods for cash, credit, other valuable considerations for any reason
other than against performance of contract. Eg. by compulsion of law i.e. supply
of food, sugar, fertilizers etc under levy under government orders.
(e) The supply of goods by any association or body of persons, incorporated or not,
to its member for cash, deferred payment (i.e. on credit) or other valuable
consideration.
(f) The transfer of the right to use any goods for any purpose (whether or not for a
specified period) for cash, deferred payment or other valuable consideration.
Eg. Letting out vehicles on hire, hire of VCDs by video libraries etc
The following are not sale :
Branch transfer, gift, donation, self-consumption, labour job not involving transfer of
property in goods, free replacement of parts during warranty period etc.
The definition of sale helps to determine tax liability since tax is charged only on
those activities that are covered by sale. Basically, sale means sale of goods
involving transfer of title to property in goods for a consideration. It may be noted that
only a sale within Maharashtra is taxable under this Act.
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