The Supreme Court has dismissed an appeal by the Inspector of Taxes and upheld a decision that cable television connection and reconnection services were separate supplies from the television and radio signals delivered through them.
The case concerned Cablelink Limited, Cablelink Waterford Limited and Galway Cable Vision, which charged separately for connecting customers and for the ongoing service. The companies sought repayment of VAT paid on connection charges for March and April 1989 and September and October 1991, arguing that those charges qualified for lower rates than the standard rate applied when connection and signal delivery were treated as one supply. The Inspector rejected the claims.
The Appeal Commissioners found that there were two services: connection or reconnection, and the supply of signals. They concluded the connection work was “work on immovable goods”, but did not find it was development, maintenance or repair of such goods, or installation of fixtures. They did not decide whether a separate statutory heading involving a two-thirds limit on the value of goods supplied applied. The High Court upheld their decision.
The Supreme Court considered whether the two services were legally distinct. It accepted that the connection work existed to enable signal delivery and that the equipment remained Cablelink’s property. But the work involved installing cables, boxes, antennas or related equipment at customers’ premises. It was physically and temporally separate from signal delivery, could be costed separately, and varied according to the work required at each property. The court also noted that an independent company could hypothetically perform the connection work.
The court concluded that the connection and reconnection services were distinct supplies. It answered the question referred in the Case Stated in the affirmative and dismissed the Inspector’s appeal. The appeal concerned whether there were one or two supplies; the Supreme Court did not decide whether the particular lower-rate statutory heading claimed by the companies applied.