18ASale value of goods in special cases

18A Sale value of goods in special cases

(1) Where: (a) goods (in this section referred to as the relevant goods), not being goods treated by the 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; (b) under an agreement entered into for the purpose, or for purposes that included the purpose, of securing that the amount of the sale value of the relevant goods would be less than the amount that could reasonably be expected to be the amount of the sale value of the relevant goods if the agreement had not been entered into, valuable consideration (in this section referred to as the relevant consideration) has been given, directly or indirectly, by the purchaser, or by another person, to the manufacturer or another person for, or in connection with, any of, or any 2 or more of, the following acts: (i) the grant of a right or option to purchase goods; (ii) the exercise, in whole or in part, of a right or option to purchase goods; (iii) the surrender or other termination, in whole or in part, of a right or option to purchase goods; (iv) allowing a right or option to purchase goods to lapse in whole or in part; (v) the assignment, in whole or in part, of a right or option to purchase goods; (vi) the provision of, or procuring the provision of, services in connection with the relevant goods; and (c) the relevant goods were sold: (i) in a case where the relevant consideration has been so given, in whole or in part, for, or in connection with, any of, or any 2 or more of, any acts referred to in subparagraphs (b)(i) to (v) (inclusive)—after 20 September 1978; or (ii) if subparagraph (i) does not apply but the relevant consideration has been given for, or in connection with, any acts referred to in subparagraph (b)(vi) —after 16 November 1978; the sale value of the relevant goods shall, for the purposes of this Act, be determined in accordance with the provisions of this section and not in accordance with the provisions of subsection 18(1), (1B), (1C), (3A) or (4). (2) In subsection (1): (a) a reference to a right or option to purchase goods shall be read as a reference to a right or option (including a contingent right or option) to purchase: (i) goods, as defined in subsection 3(1); (ii) excluded goods; or (iii) goods as so defined and excluded goods; whether ascertained or not and whether they comprise or include the relevant goods or not; and (b) a reference to services in connection with the relevant goods shall be read as a reference to services in connection with the relevant goods or with the relevant goods and other goods (including excluded goods) and, without limiting the generality of the foregoing, shall be read as including a reference to: (i) the doing of any act or thing in relation to the manufacture or marketing of the relevant goods or the relevant goods and other goods (including excluded goods); (ii) the giving of a guarantee or warranty in respect of the relevant goods or the relevant goods and other goods (including excluded goods); or (iii) the doing of any act or thing in relation to the relevant goods or the relevant goods and other goods (including excluded goods) after their sale. (3) For the purposes of subsection (1), where any valuable consideration given under an agreement entered into for the purpose, or for purposes that included the purpose, of securing that the amount of the sale value of the relevant goods would be less than the amount that could reasonably be expected to be the amount of the sale value of the relevant goods if the agreement had not been entered into is required to be calculated by reference to the value or quantity of goods (which may include excluded goods) sold to the purchaser of the relevant goods, the valuable consideration shall be deemed to have been given under an agreement for or in connection with the doing of acts by way of the provision of services in connection with the relevant goods. (4) Subject to subsections (5) and (6), for the purposes of this Act, the sale value of goods the sale value of which is required to be determined in accordance with this section is the amount for which the goods could reasonably be expected to have been sold by the manufacturer by wholesale if no agreement of a kind referred to in paragraph (1)(b) had been entered into in relation to the sale of the goods. (5) Where: (a) the sale value of the relevant goods would, but for subsection (1), be required to be determined, for the purposes of this Act, in accordance with the provisions of subsection 18(1B) or (1C); and (b) the return required to be furnished under this Act with respect to the goods: (i) does not set forth any amount as the sale value of the goods; or (ii) sets forth an amount as the sale value of the goods that 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 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 be the sale value of those goods for the purposes of this Act. (6) Subject to subsection (5), where: (a) the sale value of the relevant goods is required to be determined, for the purposes of this Act, in accordance with the provisions of this section; (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 is related, directly or indirectly, to the sale of the relevant 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 section 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 and no agreement of a kind referred to in paragraph (1)(b) had been entered into in relation to the sale of the relevant goods; or (ii) that: (A) the purchaser could have purchased identical goods from another manufacturer 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 section 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 if no agreement of a kind referred to in paragraph (1)(b) had been entered into in relation to the sale of the identical goods; the Commissioner shall alter the sale value of the relevant goods to the amount ascertained in accordance with subsection (7), and the sale value so altered shall be the sale value of the relevant goods for the purposes of this Act. (7) The amount ascertained in relation to the relevant goods for the purposes of subsection (6) is: (a) if the Commissioner is satisfied as to the matter mentioned in subparagraph (6)(c)(i) but not as to the matters mentioned in subparagraph (6)(c)(ii)—an amount equal to the arm’s length price; (b) if the Commissioner is satisfied as to the matters mentioned in subparagraph (6)(c)(ii) but not as to the matter mentioned in subparagraph (6)(c)(i)—an amount equal to the alternative price; or (c) if the Commissioner is satisfied as to the matter mentioned in subparagraph (6)(c)(i) and also as to the matters mentioned in subparagraph (6)(c)(ii)—an amount equal to the lesser of: (i) the arm’s length price; and (ii) the alternative price. (8) For the purposes of this section, an agreement shall be taken to have been entered into for a particular purpose, or for purposes that include a particular purpose, if any of the parties to the agreement entered into the agreement for that purpose or for purposes that included that purpose. (9) 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 subsection 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. (10) In this section, 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.