To accurately satisfy the criteria and ensure VAT is charged on the margin, the taxpayer must register as a supplier operating the Profit Margin Scheme and fulfill either of the following conditions:
Goods should be purchased from either:
A person who is not registered for VAT holding a TRN number or
A Taxable Person who registered and supplied the goods under the Profit Margin Scheme or
Where input tax is not recovered on the purchase of the goods
Therefore, the clear requirement is that input tax should not be recovered on the goods supplied.
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