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The issue which arises in this appeal is whether the Appellant has right to a repayment of VAT paid on the purchase of new cars, later supplied by it in terms of a lease, and finally re-sold after about two years.
In essence while in terms of Community Law and the terms of the Sixth Directive the leasing of the cars represents a taxable supply, the VAT provisions of each of the two Member States concerned resulted in no output tax being charged on the rental payments in either territory.
In addition to arguments on the above (the Respondents' "preferred analysis") we heard submissions also on the "second alternative analysis" viz Abuse of Rights (see para 4 of the Stated Case). We were not addressed on the "first alternative analysis" and we have not considered it in our Decision.
We were referred to the Sixth Directive (77/388 EEC), Article 17(2) and (3) anent the deduction and refund of input tax. In particular Article 17(3) (a) provides:-
The relative UK legislation is enacted in Sections 24, 25 and 26 VATA 1994. In particular Section 26 provides:-
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