Purchase Tax and Carriers' Claims
Page 17
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pi connection with claims, for loss or idamage, on hauliers the question of payment of purchase tax has arisen and we are informed by the Scottish Carriers Association that the following ruling on the matter has been given by H.M. Customs and Excise.
(a) Where goods are lost or damaged in transit from one registered firm to another no liability to purchase tax will ordinarily arise on that account, if there has been no taxable sale or appropriation.
(b) Where the loss or damage occurs between a registered and an unregistered firm and the former allows a credit or free replacement a corresponding tax adjustment will be allowed. If, however, the goods are supplied under terms which leave the buyer responsible for the loss or damage no adjustment of tax can be allowed.
(c) In the event of goods damaged in transit being resold to an unregistered trader or handed over to carriers, etc., as a condition of a claim settlement, the supplier will be accountable for tax.
Before admitting a claim which includes purchase tax, the carrier should confirm that there is liability of tax in accordance with the above ruling. The term "registered firm," broadly speaking, embraces manufacturers and wholesalers.