§ Mr. Hugh Jenkinsasked the Secretary of State for Trade and Industry whether prices have been reduced in all cases where VAT is lower than purchase tax; and, if not, what action he is taking to bring them down in appropriate cases.
§ Sir G. HowePurchase tax was chargeable on the wholesale value. The VAT borne by the consumer is chargeable on the retail selling price (before tax). The guide published in March gives estimates of the net effect on selected prices and charges, taking retailers mark-up into account.
Under the Counter-Inflation Act 1973 prices and charges must correctly reflect the introduction of VAT and car tax and the abolition of PT and SET. Weights and Measures inspectors are handling any complaints that a price has been adjusted unfairly. Where the inspector is unable to secure a voluntary reduction he may issue a notice requiring the price to be restricted.