SALES TAX

Southland Times, Issue 22201, 19 December 1933, Page 6

SALES TAX

LEGISLATION ALTERED PURCHASES BY CROWN INCLUDED CONTRACTORS LIABLE (From Our Parliamentary Reporter.) Wellington, December 18. While no major alterations in the system of collection of the sales tax are proposed in the Sales Tax Amendment Bill which was introduced in the House to-night, there are a number of changes in the original legislation. Most of these have been found to be necessary as a result of the Customs Department’s experience m administering the Act. Under the original Act, the sales tax could not be recovered by wholesalers who sold taxable goods to the Crown. Experience showed that in fairness to wholesalers, it was necessary to place the Crown in the same position as other purchasers and this is provided for in the Bill. The clause is made retrospective to February 9, 1933, the day on which the original Act operProvision is made for the inclusion in the term “manufacturer” or “manufacturing wholesaler,” those persons who make up material property or some other person and then return the completed article to the owner, making a charge for the manufacturing of the article. A contractor is to be liable for the sales tax and the tax is to be computed on the following basis: Where goods manufactured by the contractor are made wholly from taxable materials, the sale value is to be deemed the amount charged by the contractor for work done by him. Another clause makes it clear that the sales tax is payable by a person who manufactures goods for the erection or construction of buildings, in cases where such goods are of like class to those sold by other manufacturers in the ordinary course of business. Builders making their own joinery or fabricating their own steelwork will be placed on the same footing respecting the sales tax as joiners and engineers who make similar goods for sale. . Many difficulties have arisen where taxable goods have been sold by retailers to wholesalers for resale by them. The Bill provides that when table goods are sold by a retailer to a wholesaler for resale or to be used in the manufacture of goods for sale, the wholesaler may deduct from the sale value of the goods sold by him in any one month the tax, inclusive of the price paid or to be paid during that month for taxable goods purchased from retailers. The wholesaler will pay the tax on the price at which he sells the goods. A similar provision is made where a manufacturing retailer purchases taxable materials from another retailer. . Legislation is also contained m the Bill making clear the position of receivers. Under the Act the Bill provides that on appointment a receiver must give notice of the fact to the Comptroller of Customs and before disposing of any of the assets of the taxpayer, set aside out of the assets such sum as appears to the Comptroller to be sufficient to provide for any sales tax payable or likely to become payable. Default on the part of a receiver to comply with these .provisions will make him personally liable. The difficulties which have arisen between traders and the department concerning the monthly accounting periods will be straightened out by the inclusion of a clause which enables the Collector of Customs to accept returns in respect of the ordinary monthly accounting periods of merchants, instead of the calendar months. For these purposes the last day of the accounting period is to be considered as the end of the month. Provision is made for the payment ot the sales tax on imported goods to be paid at the time of entry for home 'consumption or if the goods have been imported without payment of the tax properly payable, the tax shall be deemed’ to have become payable as soon as the offence in respect of these goods has been committed. Under the Customs Act it is also proposed to make provision for the Collector of Customs to sue for sales tax which has become payable.