I move amendment No. 32:

In page 16, to delete lines 35 to 38 and to substitute:

"(b) any costs in respect of commission, packing, transport and insurance incidental to the delivery of the goods—

(i) at the place within the State, indicated on the consignment note or other document necessary for the purposes of their importation, to which the goods are consigned, or

(ii) if no such place is so indicated, at the place of first transfer within the State of the cargo of which the goods consist or form part.".

The purpose of this amendment is twofold. First, the proposed new wording conforms more closely with the relevant terms of the Sixth Directive, Article 11 (B) (3) (b). Secondly, it replaces the term "up to the time of importation" in relation to costs incidental to the importation of goods. It is considered, on review, that the time of importation may be imprecise and, accordingly, that the use of this term would not lend itself to efficient administration.

Am I correct in saying that an importer is not liable for tax until he sells the goods?

Correct.

A furniture manufacturer is liable for the inputs when he starts putting the furniture together but an importer of foreign goods is not liable until he sells the product. The internal manufacturer is at a disadvantage as compared with the importer.

This argument has been made frequently. When the whole question is examined in detail it would appear that the advantage involved is more psychological than real. Nevertheless the fact that there is a psychological advantage may operate to the detriment of the home manufacturer. On the other hand, an across-the-board remedy of this by simply applying VAT at the point of importation would, on balance, operate to our detriment because it would affect the importation of raw materials by Irish manufacturers and the overall balance would be to the national disadvantage rather than to our advantage. However, as I indicated earlier on another amendment, we propose making certain changes that will not go as far as applying VAT globally at importation but which should go some distance in dealing with what are the most acute problems arising in connection with people who are alleged to be bringing in goods, not paying VAT because they are not liable at importation and effectively going around the country disposing of the goods on a mobile basis. We do not have the complete answer to the problem but we propose making certain changes to try to reduce its incidence.

There is also another category—the very big store that has two ranges of goods, one imported and the other manufactured at home. The owner has to pay VAT on the Irish product but not on the imported goods until he sells them. Therefore, his cash flow is interfered with.

There is a differentiation between a retailer and a wholesalers and a wholesaler who is also a retailer. I had to leave the meeting today and pay more than £11,000 VAT on a consignment, as a retailer. If I were a wholesaler I would not have had to pay that money.

I do not follow that.

A consignment of goods came into the country and I had to pay VAT on them. I would not have been liable for this if I had been a wholesaler.

If a retailer is registered he does not have to pay.

It does not matter whether he is registered or not. I had to pay nearly £12,000 this morning.

I have told the Deputy that if a retailer is registered he will not have to pay VAT at importation.

There is also the case of the fly-by-nights and those companies that are wound up before the Revenue Commissioners get to them. These are the kind of people I am trying to pin down.

Perhaps it would be more appropriate to raise this matter on amendment No. 33 where we deal specifically with that problem.