10 Determination of turnover of sale in cases of transfer of right to use any goods

The tax on the turnover of sale where such sale of any taxable goods is effected by way of transfer of right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration shall be computed on taxable turnover. For the purpose of determining the taxable turnover of sale of such goods, the amounts specified below shall be deducted if they are included in the gross turnover-

(a) the amount representing the amount receivable in respect of transfer of right to use any exempt goods;

(b) amount receivable as penalty for defaults in payments or as damages or any loss caused to the goods by the person to whom such transfer was made;

(c) amount receivable in respect of transfer, delivery or supply of goods under the contract or agreement of transfer of right to use goods for any purpose where such transfer, by the lessor to the lessee, is made as a result of a sale-

(i) in the course of inter-state trade or commerce; or

(ii) outside the State; or

(iii) 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.

Where under an agreement of transfer of right to use any goods, such right is exercised in more than one assessment year, for the purpose of computing turnover for any assessment year subsequent to the assessment year in which actual date of transfer of right to use such goods falls, it shall be deemed that transfer of right to use such goods, for any such subsequent assessment year, has been affected on the first day of each such subsequent assessment year.