18Sale value of goods

18 Sale value of goods

(1) Subject to subsections (1B), (1C) and (4A), where goods (other than goods treated by a manufacturer as stock for sale by retail) have been sold by the manufacturer to an unregistered person or to a registered person who has not quoted his certificate in respect of the sale, the sale value of the goods, for the purposes of this Act, is: (a) if the goods were sold by wholesale—the amount for which the goods were sold; or (b) if the goods were sold by retail—the amount for which the goods could reasonably be expected to have been sold by the manufacturer by wholesale. (1A) Where: (a) goods that have been sold by the manufacturer after 20 September 1978 to an unregistered person or to a registered person who has not quoted his certificate in respect of the sale: (i) were manufactured for the purchaser in whole or in part out of materials supplied by the purchaser; and (ii) were sold by the manufacturer to the purchaser for an amount that is less than the amount for which the goods could reasonably be expected to have been sold by the manufacturer by wholesale if all the materials used in the manufacture of the goods had been purchased by the manufacturer in the ordinary course of his business from a person with whom he was dealing at arm’s length; or (b) goods: (i) have been manufactured in Australia for a person in whole or in part out of materials supplied by that person; (ii) are deemed by section 17A to have been sold by the manufacturer to that person; and (iii) the person to whom the goods are deemed to have been sold was an unregistered person or a registered person who had not quoted his certificate in respect of the sale that was so deemed to have occurred; subsection (1B) applies to the goods. (1B) Subject to subsection (4A), the sale value of goods to which this subsection applies is: (a) where all the relevant materials used in the manufacture of the goods consisted of goods the sale values of which were exempt from sales tax by virtue of the Sales Tax (Exemptions and Classifications) Act 1935—the amount for which the goods could reasonably be expected to have been sold by the manufacturer by wholesale if all the materials used in the manufacture of the goods had been purchased by the manufacturer in the ordinary course of his business from a person with whom he was dealing at arm’s length; (b) where all the relevant materials used in the manufacture of the goods comprised: (i) excluded goods; (ii) goods the sale values of which were not exempt from sales tax by virtue of the Sales Tax (Exemptions and Classifications) Act 1935; or (iii) excluded goods and goods referred to in subparagraph (ii); the amount charged to the purchaser by the manufacturer in respect of the goods; or (c) in any other case—the sum of: (i) the amount for which the manufacturer could reasonably be expected to have purchased by wholesale materials identical in all material respects with the relevant materials used in the manufacture of the goods which consisted of goods the sale values of which were exempt from sales tax by virtue of the Sales Tax (Exemptions and Classifications) Act 1935 from another person who sold by wholesale the materials identical in all material respects with the relevant materials in the ordinary course of his business; and (ii) the amount charged to the purchaser by the manufacturer in respect of the goods. (1C) Subject to subsection (4A), where goods sold after 20 September 1978 by the manufacturer to an unregistered person or to a registered person who has not quoted his certificate in respect of the sale have been manufactured for the purchaser in whole or in part out of materials sold to the manufacturer: (a) by the purchaser; or (b) by another person who did so at the request of, or under an agreement with, the purchaser; the sale value of the goods, for the purposes of this Act, is the amount for which the goods could reasonably be expected to have been sold by the manufacturer by wholesale if all the materials used in the manufacture of the goods had been purchased by the manufacturer in the ordinary course of his business from a person with whom he was dealing at arm’s length. (2) For the purposes of this Act the sale value of goods treated by the manufacturer of the goods as stock for sale by retail shall be the amount for which those goods could reasonably be expected to be sold by the manufacturer by wholesale: Provided that in any case where the Commissioner is satisfied, with respect to all the goods used in, wrought into or attached to any goods (being goods to which this subsection applies) manufactured by the taxpayer, that sales tax has been paid in respect of the goods so used, wrought into or attached, the sale value of the manufactured goods may, at the option of the taxpayer, be the amount of the wages actually paid by him in respect of the manufacture of the manufactured goods increased by 75% of that amount: Provided further that where any goods to which this subsection applies have been manufactured for the taxpayer wholly or in part out of goods supplied by him to another person for that purpose, and the Commissioner is satisfied that sales tax has been paid in respect of all the goods so supplied, the sale value of the manufactured goods shall be the total amount payable by the taxpayer to that other person in respect of the manufacture of the manufactured goods increased by 331/3% of that amount. (3) For the purposes of this Act, the sale value of goods manufactured by any person and applied to his own use shall be the amount for which those goods could reasonably be expected to be sold by the manufacturer by wholesale: Provided that in any case where the Commissioner is satisfied with respect to all the goods used in, wrought into or attached to any goods (being goods to which this subsection applies) manufactured by the taxpayer, that sales tax has been paid in respect of the goods so used, wrought into or attached, the sale value of the manufactured goods shall, unless the manufacturer sells similar goods by wholesale, be the amount of the wages actually paid in respect of the manufacture of the manufactured goods increased by 20% of that amount. (3A) Where, in the case of goods to which paragraph (1)(b) applies or to which subsection (2) or (3) applies (not being goods to which either of the provisoes to subsection (2) or the proviso to subsection (3) applies): (a) no sale value of the goods has been set forth in any return required to be furnished under this Act; or (b) the amount set forth in any return required to be furnished under this Act as the sale value of the goods is less than the amount which, in the opinion of the Commissioner, is a fair and reasonable wholesale value of the goods; the Commissioner may, whether or not the goods are of a class sold by any other person by wholesale, determine the amount which, in his opinion, is a fair and reasonable wholesale value of the goods, and, if he does so, the Commissioner shall be deemed to have altered the sale value of the goods (whether a sale value was set forth in the return or not) to the amount so determined by him, and the value as so deemed to be altered shall, notwithstanding subsection (1), (2) or (3), as the case may be, be the sale value of those goods for the purposes of this Act. (3B) Subject to subsections (5A) and (5B), but notwithstanding any other provision of this section, the sale value of goods, being so much of a swimming pool as is constructed in situ, is the amount which the manufacturer of the goods could reasonably be expected to have paid another person, being a person who constructs swimming pools in the ordinary course of the person’s business, for the construction of the goods if: (a) all the materials used in or in connection with the construction were supplied by that other person; and (b) the manufacturer and that other person were dealing with each other at arms’ length in relation to the construction. (4) Where: (a) goods (in this subsection referred to as the relevant goods) have been sold after 20 September 1978 by the manufacturer by wholesale to an unregistered person or to a registered person who has not quoted his certificate in respect of the sale; (b) the Commissioner is satisfied that, having regard to any connection between the manufacturer and the purchaser of the relevant goods or to any other relevant circumstances (including circumstances arising out of any agreement entered into between the manufacturer and the purchaser, or out of any other agreement, that was related, directly or indirectly, to the sale of the goods), the manufacturer and the purchaser were not dealing with each other at arm’s length in relation to the transaction; and (c) the Commissioner is also satisfied: (i) that the amount for which the relevant goods were sold is less than the amount (in this subsection referred to as the arm’s length price) for which, in the opinion of the Commissioner, the relevant goods could reasonably be expected to have been sold if the manufacturer and the purchaser had been dealing with each other at arm’s length in relation to the transaction; or (ii) that: (A) the purchaser could have purchased identical goods from another manufacturer by wholesale and obtained delivery of the identical goods at or about the time when the purchaser obtained delivery of the relevant goods; and (B) the amount for which the relevant goods were sold is less than the amount (in this subsection referred to as the alternative price) for which, in the opinion of the Commissioner, the identical goods could reasonably be expected to have been sold to the purchaser; the Commissioner shall alter the sale value of the relevant goods to the amount ascertained in accordance with the following paragraphs: (d) if the Commissioner is satisfied as to the matter mentioned in subparagraph (c)(i) but not as to the matters mentioned in subparagraph (c)(ii)—an amount equal to the arm’s length price; (e) if the Commissioner is satisfied as to the matters mentioned in subparagraph (c)(ii) but not as to the matter mentioned in subparagraph (c)(i)—an amount equal to the alternative price; (f) if the Commissioner is satisfied as to the matter mentioned in subparagraph (c)(i) and also as to the matters mentioned in subparagraph (c)(ii)—an amount equal to the lesser of: (i) the arm’s length price; and (ii) the alternative price. (4A) Where the Commissioner alters the sale value of goods in pursuance of subsection (4), the sale value so altered shall be the sale value of the goods for the purposes of this Act. (5) For the purposes of this section, the sale value of goods shall not be increased by any amount payable in respect of sales tax but, when the goods are sold in bond, the sale value shall be increased by the amount of any duty of excise to which the goods would be subject if entered for home consumption at the time at which they are sold. (5A) Notwithstanding anything contained in this section, in the case of any prescribed goods manufactured to the order of individual customers, the sale value shall be an amount ascertained in such manner as is prescribed, but not exceeding the amount for which the goods are sold. (5B) Notwithstanding anything contained in this Act, the Commissioner may enter into an agreement with any taxpayer as to the manner of ascertaining the sale value or sale values of goods which during the period of the agreement become the subject of any transaction, act or operation effected or done by the taxpayer in respect of which tax is payable under this Act and the sale value or sale values ascertained in the manner specified in the agreement shall, for the purposes of this Act, be the sale value or sale values of those goods in respect of those transactions, acts or operations. The agreement may be in respect of any or all of those goods and in respect of any or all of the transactions, acts or operations effected or done by the taxpayer in relation thereto. (5C) Every agreement made pursuant to subsection (5B) shall commence on a date which shall be specified in the agreement and shall continue in force until a date specified in a notice in writing of determination, which either party may at any time give to the other party, or such earlier date as a party receiving a written notice of determination may specify by a further notice in writing of determination to the other party: Provided that no notice of determination, or further notice of determination, shall specify a date earlier than the date on which that notice, or further notice (as the case may be), is given to the other party. (6) For the purposes of this section: (a) goods manufactured for a person (in this subsection referred to as the customer) shall be taken to have been manufactured in whole or in part out of materials supplied by the customer if the goods were manufactured in whole or in part out of materials: (i) which were supplied by the customer or by another person at the request of, or under an agreement with, the customer; or (ii) which the customer purchased, or agreed to purchase, from the manufacturer; and (b) the materials which were so supplied or purchased and were used in the manufacture of the goods shall be taken to have been the relevant materials used in the manufacture of the goods. (7) In this section: (a) a reference to excluded goods shall be read as a reference to goods, including commodities, of a kind referred to in paragraph (a) or (b) of the definition of goods in section 3(1); and (b) a reference to identical goods shall be read as a reference to goods identical in all material respects with the goods in relation to which the expression is used. (8) In subsections (1A), (1C), (4) and (6), agreement means any agreement, arrangement or understanding: (a) whether formal or informal; (b) whether express or implied; or (c) whether or not enforceable, or intended to be enforceable, by legal proceedings.