Lease of property: whether rent inclusive or exclusive of VAT
In Mauritius National Transport Authority v Mauritius Secondary Industry Ltd (Privy Council – 13 December) a company leased a property to a tenant. The lease agreement made no mention of VAT. The landlord added VAT to the rent. The tenant refused to pay the VAT and the landlord took legal proceedings. The Privy Council allowed the tenant’s appeal holding that under the lease agreement the landlord had no claim on the tenant for any further payment in respect of VAT. It was the person making the supply who was liable for VAT on the value of the supply that he had made. If a supplier failed to make it plain that he required payment of VAT in addition to the contract price he would have to account for VAT out of what he received.
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Lease of property: whether rent inclusive or exclusive of VAT
In Mauritius National Transport Authority v Mauritius Secondary Industry Ltd (Privy Council – 13 December) a company leased a property to a tenant. The lease agreement made no mention of VAT. The landlord added VAT to the rent. The tenant refused to pay the VAT and the landlord took legal proceedings. The Privy Council allowed the tenant’s appeal holding that under the lease agreement the landlord had no claim on the tenant for any further payment in respect of VAT. It was the person making the supply who was liable for VAT on the value of the supply that he had made. If a supplier failed to make it plain that he required payment of VAT in addition to the contract price he would have to account for VAT out of what he received.
Why it...
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