Value-Added Tax Act, 1972

Relief for stock-in-trade held on the specified day.

34.—(1) In computing the amount of tax payable by an accountable person, the following amounts may, subject to subsections (3) and (4), in addition to the deductions authorised by section 12, be deducted on account of stock-in-trade which has been delivered to, and has not been delivered by, him before the specified day and which is held by him at the commencement of that day, or incorporated in other stock-in-trade held by him at such commencement, that is to say:

(a) in case the accountable person was, immediately before the specified day, not registered for turnover tax under the provisions of section 49 of the Finance Act, 1963 , nor required under the provisions of that section to furnish the particulars specified for registration, and was not registered for wholesale tax under the provisions of section 4 of the Finance (No. 2) Act, 1966 , nor required under the provisions of that section to furnish the particulars specified for registration, an amount equal to the sum of the amounts which he would be liable to pay on account of turnover tax and wholesale tax if,

(i) he had been accountable for each of those taxes,

(ii) he had on the day immediately preceding the specified day sold the whole of his stock-in-trade aforesaid in the course of business to a person who was carrying on the same activities as his own and who had not given him, in accordance with section 50 of the Finance Act, 1963 , a statement in writing quoting the turnover tax registration number of the person nor given him, in accordance with section 5 of the Finance (No. 2) Act, 1966 , a statement in writing quoting the wholesale tax registration number of the person, and

(iii) he had on the said day immediately preceding the specified day received from the person mentioned in subparagraph (ii) payment for the stock-in-trade so deemed to have been sold of an amount equal to the cost to the accountable person of such stock or the market value thereof, whichever is the lower, and

(b) in case, immediately before the specified day the accountable person was registered for turnover tax under the provisions of section 49 of the Finance Act, 1963 , or required under the provisions of that section to furnish the particulars specified for registration, but was not registered for wholesale tax under the provisions of section 4 of the Finance (No. 2) Act, 1966 , nor required under the provisions of that section to furnish the particulars specified for registration, an amount equal to the amount of wholesale tax which he would be liable to pay if,

(i) he had been an accountable person for the purposes of wholesale tax,

(ii) he had on the day immediately preceding the specified day sold the whole of his stock-in-trade aforesaid in the course of business to a person who was carrying on the same activities as his own and who had in accordance with section 50 of the Finance Act, 1963 , given him a statement in writing quoting the registration number of the person but had not given him, in accordance with section 5 of the Finance (No. 2) Act, 1966 , a statement in writing quoting the wholesale tax registration number of such person, and

(iii) he had on the said day immediately preceding the specified day received from the person mentioned in subparagraph (ii) payment for the stock-in-trade so deemed to have been sold of an amount equal to the cost to the accountable person of such stock or the market value thereof, whichever is the lower.

(2) Where an accountable person—

(a) is not such a person as is mentioned in paragraph (a) or (b) of subsection (1) but was such a person at any time during the year ended the day immediately preceding the specified day or

(b) is such a person as is mentioned in paragraph (a) or (b) of subsection (1) and was such a person during a part of the year ended the day immediately preceding the specified day but was not such a person during another part of that year,

the Revenue Commissioners may allow such deduction or make such restriction in the deduction which would otherwise be allowable as in their opinion is just and reasonable having regard to the nature of the business carried on, the period during the year ended on the day immediately preceding the specified day during which the business was carried on and the period during the said year during which the person was such a person as is mentioned in the said paragraph (a) or (b) of subsection (1).

(3) A claim for a deduction under this section shall be made in accordance with regulations and the amount authorised to be deducted may be deducted by equal instalments in computing the amount of tax payable in respect of each of the taxable periods beginning on the first day of the first and second taxable periods next following that in which the specified day occurs.

(4) No deduction shall be granted under this section for any amount which is referable to turnover tax or wholesale tax on immovable goods on the delivery of which tax is, by virtue of section 4 (6), not chargeable or to wholesale tax on newspapers or periodicals, secondhand goods or any goods of a kind specified in the Fourth Schedule.

(5) In this section—

“stock-in-trade” means, in relation to any person, goods which are either—

(a) movable goods of a kind that are delivered by the person in the ordinary course of his business and are actually held for delivery or would be so held if they were mature or if their manufacture, preparation or construction were complete, or

(b) materials incorporated in immovable goods of a kind that are delivered by the person in the ordinary course of his business and that have not been delivered by him since the goods were developed, but are actually held for delivery or would be so held if their development were complete, or

(c) consumable materials incorporated in immovable goods by the person in the course of a business consisting of the rendering of a service of constructing, repairing, painting or decorating immovable goods where that service has not been completed, or

(d) materials which have not been incorporated in goods and are such as are used by the person in the manufacture or construction of goods of a kind that are delivered by the person in the ordinary course of his business or, where his ordinary business consists of repairing, painting or decorating immovable goods, are used by him as consumable materials in the course of that business;

materials referred to in paragraph (b) of the definition of “stock-in-trade” shall, for the purposes of subsection (1), be regarded as having been delivered to the same extent as the immovable goods into which they have been incorporated can be regarded as having been delivered;

materials referred to in paragraph (c) of the definition of “stock-in-trade” shall be regarded as having been delivered to the extent that the service in relation to which they have been used has been rendered;

“cost” means, in relation to stock-in-trade, the total of the money payable by the person for the delivery of the stock, including any addition made for turnover tax or wholesale tax, but excluding any discount or allowance deducted or deductible on payment for the stock.