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Exceptional claims for tax relief

Goods and Services Tax (General) Regulations

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—(1) Subject to paragraphs (2), (2A), (2B), (2E), (2F) and (4), on a claim made in accordance with paragraph (3), the Comptroller may authorise a taxable person to treat as if it were input tax —(a)tax on the supply of goods or services to the taxable person before the date with effect from which he was, or was required to be registered, or paid by him on imported goods before that date, for the purpose of a business which either was carried on or was to be carried on by him at the time of such supply or payment; and(b)in the case of a body corporate, tax on the supply or importation of goods acquired for it before its incorporation, or on the supply of services before that time for its benefit or in connection with its incorporation, provided that the person (X) to whom the supply was made or who paid tax on the importation —(i)became a member, officer or employee of the body and was reimbursed, or has received an undertaking to be reimbursed by the body for the whole amount of the price paid for the goods or services;(ii)was not at the time of supply or importation a taxable person; and(iii)acquired the goods or services for the purpose of a business to be carried on by the body and has not used them for any purpose other than such business.(2) Subject to paragraphs (2A) and (2D), where, 6 months or less before the registration date of the taxable person mentioned in paragraph (1) —(a)a supply of goods mentioned in paragraph (1)(a) was made to the taxable person or a supply of goods mentioned in paragraph (1)(b) was made to X (as the case may be) (called in this regulation the relevant person); or(b)tax was paid by the relevant person on imported goods mentioned in paragraph (1)(a) or (b),then the tax on the supply or the tax paid on the imported goods (as the case may be) must not be treated as input tax under paragraph (1) to the extent that, before the registration date —(c)the relevant person made a supply of the goods to any other person as follows:(i)a supply (not being one in sub-paragraph (iii)) by way of the transfer or disposal of the whole property in any of the goods (whether by gift, sale or otherwise);(ii)a supply (not being one in sub-paragraph (iii)) by way of the transfer of possession of any of the goods under —(A)an agreement for the sale of the goods; or(B)an agreement that expressly contemplates that property in the goods will pass at some time in the future that is determined by or ascertainable from the agreement, but in any case not later than when the goods are fully paid for;(iii)where the supply to the relevant person was a grant, an assignment or a surrender of any interest in any land (other than the grant of a tenancy or lease) — a grant, an assignment or a surrender of any part of the interest in the land (other than the grant of a tenancy or lease); or(d)except as the Comptroller may otherwise allow, the goods were consumed or used by the relevant person.(2A) Where —(a)the goods supplied or imported by the relevant person under paragraph (2) comprised utilities; or(b)the supply of goods to the relevant person under paragraph (2) was a grant of a tenancy or lease, or a licence to occupy any land,then the tax on the supply or the tax paid on the import (as the case may be) must not be treated as input tax under paragraph (1) to the extent that, before the registration date —(c)the relevant person used the goods to make a supply of goods or services to any other person;(d)the goods formed any part of the overheads of the relevant person, and the consideration for the goods was paid by a person other than the relevant person (whether directly to the person who supplied the goods to the relevant person or indirectly through the relevant person); or(e)without affecting the application of sub-paragraphs (c) and (d) to this case, where the supply to the relevant person was a grant of a tenancy or lease, or a licence to occupy any land — the premises to which the grant or licence relates was not used as premises from or at which the relevant person carried on the business to be carried on by the taxable person.(2B) Subject to paragraphs (2C) and (2D), where, more than 6 months before the registration date of the taxable person mentioned in paragraph (1) —(a)a supply of goods mentioned in paragraph (1)(a) or (b) was made to the relevant person; or(b)tax was paid by the relevant person on imported goods mentioned in that provision,then the tax on the supply or the tax paid on the imported goods (as the case may be) must not be treated as input tax under paragraph (1) —(c)to the extent that, before the registration date, the relevant person made a supply of those goods to any other person;(d)where the supply to the relevant person was a grant of a tenancy or lease, or a licence to occupy any land — in respect of the period of the grant or licence ending immediately before the registration date; or(e)to the extent that, before the registration date, the goods were consumed or used by the relevant person.(2C) However, the Comptroller may allow tax in relation to any part of the period in paragraph (2B)(d), or any of the goods consumed or used as described in paragraph (2B)(e), to be treated as input tax under paragraph (1).(2D) For the purposes of paragraphs (2) and (2B), where, before the registration date, the goods supplied to or imported by the relevant person were —(a)incorporated with or affixed to other goods; or(b)used to make other goods,then the references to the goods that were supplied by the relevant person to any other person are references to such other goods.(2E) Where, 6 months or less before the registration date of the taxable person mentioned in paragraph (1), services mentioned in paragraph (1)(a) or (b) were supplied to the relevant person, the tax on the supply must not be treated as input tax under paragraph (1) to the extent that, before the registration date —(a)in a case where the services supplied to the relevant person form any part of the overheads of the relevant person — the consideration for the supply was paid by a person other than the relevant person (whether directly to the person who supplied the services to the relevant person or indirectly through the relevant person); and(b)in any other case — the relevant person used the services to make a supply of goods or services to any other person.(2F) Where, more than 6 months before the registration date of the taxable person mentioned in paragraph (1), services mentioned in paragraph (1)(a) or (b) were supplied to the relevant person, the tax on the supply must not be treated as input tax under paragraph (1).(3) A claim under paragraph (1) shall, except as the Comptroller may otherwise allow, be made on the first return the taxable person furnishes under regulation 52 and, as the Comptroller may require, be supported by invoices and other evidence.(4) A taxable person making a claim under paragraph (1) shall compile and preserve for such period as the Comptroller may require —(a)in respect of goods, a stock account showing separately quantities purchased, quantities used in the making of other goods, date of purchase and date and manner of subsequent disposals of both such quantities; and(b)in respect of services, a list showing their description, date of purchase and date of use, if any.(5) If a person who has been, but is no longer, a taxable person makes a claim in such manner and supported by such evidence as the Comptroller may require, the Comptroller may pay to that person the amount of any tax on the supply of services to him after the date with effect from which he ceased to be registered or ceased to be required to register and which was attributable to any non-specified taxable supply made by him in the course or furtherance of any business carried on by him when he was or was required to be registered.(6) In this regulation —“grant of a tenancy or lease” means the grant of a tenancy or lease where the whole or part of the consideration for that grant is payable periodically and attributed to separate periods of the term of the tenancy or lease;“registration date”, in relation to a taxable person, means the date with effect from which the person is a registered person;“utilities” means any form of power (including electricity), gas, water, light, heat, refrigeration, air conditioning or ventilation.

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