Section 11B(2) in Kerala General Sales Tax Rules, 1963
(2)If difference in prices exclusive of the sales-tax element is more than fifteen percent, the assessing authority shall examine the reasons for the variation taking into account the relationship between the parties to the transactions, the charge for after sale services, packaging, transport and other expenses incurred by subsequent sellers which added to the cost of the goods at each stage of sale by successive dealers. The assessing authority shall also examine whether there is such difference in price charged on sales of the same goods to different customers and whether the goods are made available to all distributors or other customers in unlimited quantities and at the same price. After making due allowance towards the variation in price and normal profit margin, the assessing authority shall arrive at the market price that should have been charged by the dealer and levy tax on the taxable value so arrived at.
