§ Mr. BeggsTo ask the Chancellor of the Exchequer what is the estimated increase in cost per 50 kg. bag of domestic coal to consumers when coal delivery merchants are charged value added tax at the importer's storage depot.
§ Mr. LilleyUnder the proposals for implementing the European Court of Justice judgment on VAT zero rates which were published on 6 February, the supply of coal to domestic consumers will remain zero-rated, but supplies at earlier stages in the distribution chain will be liable to the standard rate of VAT from 1 July 1990. Coal delivery merchants who are registered for VAT will be able to deduct any VAT charged to them by their suppliers under the normal input tax credit mechanism. The effect on the price to the domestic consumer should be negligible.