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Finance Act 1948

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This is the original version (as it was originally enacted).

Part IIPurchase Tax

20New purchase tax rates

(1)Subject to the provisions of this Part of this Act relating to drugs and medicines, the provisions of Part I of the Eighth Schedule to this Act shall have effect, and shall be deemed to have had effect as from the ninth day of April, nineteen hundred and forty-eight, in substitution for any enactment in force before that date, for determining what goods are chargeable goods for the purposes of purchase tax and the rates of purchase tax chargeable in respect of goods of any class :

Provided that—

(a)the provisions of the said Part I exempting from purchase tax articles knitted or crocheted by hand without mechanical aid, including such articles embroidered by hand-needlework, shall be deemed to have had effect only as from the first day of June nineteen hundred and forty-eight; and

(b)the tissues and fabrics mentioned in sub-paragraph (i) of paragraph (a) of Group 6 in the said Part I shall be deemed to have been chargeable at the second rate for the period beginning with the said ninth day of April and ending with the second day of May nineteen hundred and forty-eight; and

(c)the articles mentioned in paragraph (c) of Group 23 in the said Part I shall be deemed to have been chargeable at the second rate for the period beginning with the said ninth day of April and ending with the thirty-first day of May, nineteen hundred and forty-eight ; and

(d)the following articles shall be deemed to have been chargeable at the rates hereinafter respectively specified for the period beginning with the said ninth day of April and ending with the fifteenth day of June nineteen hundred and forty-eight, that is to say—

utility garments made wholly or mainly of fur skinSecond
articles comprised in paragraph (d) of Group 5 in the said Part ISecond
paper handkerchiefs and paper towelsSecond
articles comprised in sub-paragraph (iii) of paragraph (b) of Group n in the said Part ISecond
articles comprised in paragraph (r) 0f Group ii in the said Part IFirst
appliances comprised in paragraph (b) of Group 12 in the said Part I, being appliances suitable for operation from gas mainsThird
articles comprised in paragraph (d) of Group 14 in the said Part I, other than glass chimneys and similar primary glassesFirst
articles comprised in sub-paragraph (i) of paragraph (a) of Group 17 in the said Part I or in sub-paragraph (i) of paragraph (b) of that Group or in sub-paragraph (i) of paragraph (c) of that GroupSecond
articles comprised in paragraph (a) of Group 18 in the said Part ISecond

(2)In the said Part I the words " First ", " Second " and " Third " indicate the first, second and third rates of purchase tax which are respectively one-third, two-thirds and one hundred per cent. of the wholesale value of the goods.

(3)In the said Part I—

(a)the expression " Exempt" means exempt from all charge of purchase tax ;

(b)the expression " utility " in relation to any goods means goods which, under any order made by the Board of Trade by virtue of any Act, are duly marked with a mark defined as the utility mark by any such order.

(4)Where under the said Part I any goods are chargeable at more than one rate, purchase tax shall be chargeable in respect of those goods at the higher or highest of those rates.

(5)In determining the question which of two rates of purchase tax is chargeable under the said Part I in respect of a vehicle, where that question depends on the retail value of the vehicle, the provisions of Part II of the Fourth Schedule to the Finance Act, 1947, shall have effect, but subject to the modification that the reference to the basic rate in paragraph 2 of the said Part II (which assumes that the seller by retail has suffered the incidence of tax at the basic rate) shall be taken to be a. reference to the lower of the two rates in question.

21Treasury orders

(1)The Treasury shall have power by order—

(a)to make any change in the classes of goods which are chargeable goods or to substitute one of the rates of purchase tax provided for by the enactments relating to purchase tax for any other rate as the rate of tax chargeable in respect of goods of any class; and

(b)to amend Part I of the Eighth Schedule to this Act. The provisions of this section shall be in substitution for the provisions of section twenty of the Finance (No. 2) Act, 1940.

(2)The reference to an order made under the said section twenty in subsection (1) of section two of the Finance Act, 1945 (which authorises the definition of a class of goods affected by such an order to be made by reference to any mark the use of which the Board of Trade have power to regulate) shall be construed as a reference to an order made underthis section.

(3)An order made under this section may be varied or revoked by a subsequent order so made.

(4)The power to make orders under this section shall be exercisable by statutory instrument and any statutory instrument by which the power is exercised shall be laid before the Commons House of Parliament after being made.

(5)Any statutory instrument under this section which extends the incidence or increases the rate of purchase tax shall cease to have effect on the expiration of a period of twenty-eight days from the date on which it is made, unless at some time before the expiration of that period it has been approved by a resolution of the Commons House of Parliament, but without prejudice to anything previously done thereunder or to the making of a new order. In reckoning any such period of twenty-eight days as aforesaid no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the Commons House is adjourned for more than four days.

(6)Any other statutory instrument under this section shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

(7)The provisions of the last four preceding subsections shall apply to orders made by the Treasury under section sixteen of the Finance Act, 1946 (which relates to chargeable processes) in substitution for the provisions of subsection (4) of section twenty of the Finance (No. 2) Act, 1940.

22Drugs and medicines

(1)The provisions of Part II of the Eighth Schedule to this Act shall have effect for the purposes of the provisions of Part I thereof relating to drugs and medicines, but, notwithstanding anything in the last but one preceding section, goods shall not by reason of complying with the provisions of the said Part II be deemed to have been exempt from tax becoming chargeable before the first day of June, nineteen hundred and forty-eight.

(2)An order made by the Treasury under the last preceding section—

(a)may vary or revoke the Purchase Tax (No. 1) Order, 1948 (which relates to drugs and medicines); and

(b)may define any class of drugs or medicines by a reference (either inclusive or exclusive) to any kind of get-up of the goods ; and

(c)may amend Part II of the Eighth Schedule to this Act. In this subsection, the reference to get-up includes a reference to marking, labelling, packing or any other treatment adopted for identifying goods or presenting goods to the user or consumer.

23Extension of meaning of manufacture

Without prejudice to the generality of any existing definition in the enactments relating to purchase tax, any treatment of goods which affects the get-up of the goods and which results in the goods becoming chargeable goods or becoming goods in respect of which tax is chargeable at a higher rate shall be deemed for all the purposes of the enactments relating to purchase tax to be the application of a process in the course of making the goods. In this section, the reference to get-up includes a reference to marking, labelling, packing or any other treatment adopted for identifying goods or presenting goods to the user or consumer.

24Purchases, etc., affected by, and effect on existing contracts of, change in tax

(1)Where by or under any provision of any Act (including this Part of this Act) any change is made in the classes of goods which are chargeable goods, or which may be the subject of a chargeable process, or in the rate at which purchase tax is chargeable in respect of any goods, that change shall have effect, and shall be deemed to have had effect—

(a)in relation to a purchase of goods delivered under the purchase after the time as from which the change takes effect notwithstanding that the purchase was made before that time ;

(b)in relation to the application of a chargeable process completed after that time notwithstanding that the process was applied in pursuance of a contract made before that time.

(2)Subsections (1) and (2) of section ten of the Finance Act, 1901 (which provide for adjustments between buyer and seller under contracts affected by a change in customs or excise duties) shall apply as respects changes in the classes of goods which are chargeable goods, or which may be the subject of a chargeable process, and in the rates at which purchase tax is chargeable in respect of goods of any class, as they apply to duties of customs or "excise, but subject to the modification that, in relation to the application of a chargeable process under any contract not being a purchase.—

(a)the contract shall be treated as a contract of sale ;

(b)the goods resulting from the application of the process shall be treated as having been bought under the contract; and

(c)the party to whose order the process is applied and the party who applies the process to his order shall be treated respectively as the buyer and the seller. This subsection shall have effect in substitution for section twenty-eight of the Finance (No. 2) Act, 1940, and section twenty-three of the Finance Act, 1946.

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