Section 12A. Direction to treat persons as a single taxable person. (Sales Tax Act 1972

Sales Tax Act 1972 (Act 64)
PART V - TAXABLE PERSONS - LICENSING

Section 12A. Direction to treat persons as a single taxable person.

(1) Notwithstanding sections 12 and 13, where the Director General is satisfied that any separation of business activities is artificial, he may make a direction under this section directing that the persons named in that direction shall be treated as a single taxable person carrying on the activities of the business described in that direction and that single taxable person shall not continue to carry on the activities of such business unless he is licensed within twenty-one days from the date the direction is served on the last of such persons or from such later date as may be specified in that direction.

(2) For the purposes of subsection (1) , in determining whether any separation of business activities is artificial, regard shall be had to the extent to which the different persons carrying on those business activities are closely bound to one another by financial, economic and organizational links.

(3) The Director General may make a direction under this section naming any person if the Director General is satisfied -

(a) that the person is manufacturing or has manufactured taxable goods;

(b) that the activities in the course of which the person manufactures or has manufactured those taxable goods form only part of certain activities in the business and that the other activities in that business (whether or not they are similar to the activities carried on by that person) are being carried on concurrently or previously, or both, by one or more other persons; and

(c) that if all the taxable goods manufactured in that business were taken into account, the person carrying on that business would, at the time of such direction, be required to be licensed by virtue of section 13.

(4) Any direction made under this section shall be served on each of the persons named in it.

(5) Where, after a direction has been given under this section specifying a description of the business, it appears to the Director General that any person who has not been named in that direction is manufacturing taxable goods in the course of activities which should be regarded as part of the activities of the business, the Director General may make and serve on that person a supplementary direction referring to the earlier direction and the description of business specified in it, and adding that person's name to those of the persons named in the earlier direction with effect from -

(a) the date on which that person began to manufacture the taxable goods; or

(b) if the date of the earlier direction was later than the date mentioned in paragraph (a) , the date with effect from which the single taxable person referred to in the earlier direction is licensed under subsection (1) .

(6) Where, immediately before any direction (including a supplementary direction) is made under this section, any person named in the direction is licensed in respect of taxable goods manufactured by him as mentioned in subsection (3) or (5) , his licence shall be revoked by the Director General with effect from -

(a) the date the single taxable person is licensed under subsection (1) ; or

(b) such later date as may be specified in that direction,

and upon the revocation of his licence he together with all the persons named in the direction shall be treated as a single taxable person under this section.

(7) In relation to a business specified in a direction under this section, the persons named in such direction together with any person named in a supplementary direction relating to that business (being the persons who together are to be treated as a single taxable person) are in subsections (8) and (9) referred to as "the constituent members".

(8) Where any direction is made under this section, then for the purposes of this Act -

(a) the single taxable person carrying on the business specified in the direction shall be licensed in such name as the persons named in the direction may jointly nominate by notice in writing given to the Director General not later than fourteen days after the date the direction is served on the last of such persons or, in default of such a nomination, in such name as may be specified in the direction;

(b) any taxable goods manufactured by one of the constituent members in the course of the activities of the single taxable person shall be treated as being taxable goods manufactured by the single taxable person;

(c) each of the constituent members shall be jointly and severally liable for any sales tax payable by the single taxable person;

(d) without prejudice to paragraph (c) , any failure by the single taxable person to comply with any requirement imposed by or under this Act shall be treated as a failure by each of the constituent members severally; and

(e) subject to paragraphs (a) to (d) , the constituent members shall be treated as a partnership carrying on the business of the single taxable person and any question as to the scope of the activities of that business at any time shall be determined accordingly.

(9) Where it appears to the Director General that any person who is one of the constituent members should no longer be regarded as such for the purposes of subsections (8) (c) and (d) and the Director General gives notice to that effect, that person shall not have any liability by virtue of those subsections for anything done after the date specified in that notice and accordingly on that date he shall be treated as having ceased to be a member of the partnership referred to in subsection (8) (e) .

[Ins Act A1058:s.5]