This Act comes into effect on January 1, 1995; provided, however, that the provisions of Article 3 and Articles 7 through 24 and Article 28 of the Supplementary Provisions come into effect on April 1, 1997.

Except as otherwise provided in these Supplementary Provisions, the provisions of the Consumption Tax Act after the amendment by the provisions of Article 3 (hereinafter referred to as the "New Consumption Tax Act") apply to consumption tax on transfers, etc. of assets made by a business operator in Japan on or after April 1, 1997 (hereinafter referred to as the "application date"), on taxable purchases made by a business operator in Japan on or after the application date, and on foreign goods taken out of a bonded area on or after the application date, and the provisions then in force continue to govern consumption tax on transfers, etc. of assets made by a business operator in Japan before the application date, on taxable purchases made by a business operator in Japan before the application date, and on foreign goods taken out of a bonded area before the application date.

Where a business operator has made, during the base period prescribed in Article 2, paragraph (1), item (xiv) of the Consumption Tax Act, a refund, etc. of consideration for sales prescribed in Article 38, paragraph (1) (Deduction of Consumption Tax in the Case of Making a Refund, etc. of Consideration for Sales) of the New Consumption Tax Act with respect to a taxable transfer, etc. of assets (meaning a taxable transfer, etc. of assets prescribed in Article 2, paragraph (1), item (ix) (Definitions) of the Consumption Tax Act; the same applies hereinafter) made in Japan before the application date, the provisions then in force continue to govern the calculation of the taxable sales in the base period prescribed in Article 9, paragraph (1) (Exemption from Tax Liability for Small-Scale Business Operators), Article 11, paragraph (4) (Special Provisions on Exemption from Tax Liability in the Case of Merger) or Article 12, paragraph (2) (Special Provisions on Exemption from Tax Liability in the Case of a Company Split) of the New Consumption Tax Act relating to that refund, etc. of consideration for sales.

The provisions of Article 12-2 (Special Provisions on Exemption from Tax Liability of Corporations Without a Base Period) of the New Consumption Tax Act apply to a business operator that comes to fall under a newly established corporation prescribed in that Article on or after the application date.

①If a business operator has received, before the application date, payment of passenger fares, admission fees to places where films or theatrical performances are held, or any other consideration specified by Cabinet Order for taxable transfers, etc. of assets to an unspecified and large number of persons, and makes, on or after the application date, the taxable transfer, etc. of assets for which that consideration was received, the consumption tax on that taxable transfer, etc. of assets is at the rate prescribed in Article 29 (Tax Rates) of the Consumption Tax Act prior to the amendment by the provisions of Article 3 (hereinafter referred to as the "Former Consumption Tax Act").

②With regard to the supply or provision of electricity, gas, tap water and telecommunications services (meaning telecommunications services prescribed in Article 2, item (iii) (Definitions) of the Telecommunications Business Act (Act No. 86 of 1984)) that a business operator supplies or provides under a contract committing it to supply or provide them continuously and that have been continuously supplied or provided since before the application date, or any other taxable transfer, etc. of assets specified by Cabinet Order, in each case where the right to receive payment of the charge becomes fixed during the period from the application date to April 30, 1997 (for one for which the first day on or after the application date on which the right to receive payment of the charge becomes fixed is after April 30, 1997 (referred to as a "taxable transfer, etc. of assets by specified continuous supply" in this paragraph), the portion of the fixed charges specified by Cabinet Order), the consumption tax on the taxable transfer, etc. of assets relating to the fixed charge (for a taxable transfer, etc. of assets by specified continuous supply, limited to the portion of the fixed charge that corresponds to the portion so specified by Cabinet Order) is at the rate prescribed in Article 29 of the Former Consumption Tax Act.

③If a business operator makes, on or after the application date, a taxable transfer, etc. of assets relating to a contract for the undertaking of construction (including manufacture) (including a contract similar thereto specified by Cabinet Order) concluded during the period from December 30, 1988 to the day preceding October 1, 1996 (hereinafter referred to as the "designated day"), the consumption tax on that taxable transfer, etc. of assets (if the amount of consideration under that contract has been increased on or after the designated day, limited to the portion corresponding to the amount of consideration before the increase) is at the rate prescribed in Article 29 of the Former Consumption Tax Act.

④If a business operator, under a contract concluded during the period from December 30, 1988 to the day preceding the designated day relating to the lending of assets, has been lending the assets under that contract continuously from before the application date through and after the application date, and the terms of that contract satisfy the requirements set forth in items (i) and (ii), or in items (i) and (iii), the consumption tax on the lending of those assets made on or after the application date is at the rate prescribed in Article 29 of the Former Consumption Tax Act; provided, however, that this does not apply to the lending of those assets after the change if the amount of consideration for the lending of those assets was changed on or after the designated day.

⑤If a business operator provides, on or after the application date, services relating to a contract for the provision of services concluded during the period from December 30, 1988 to the day preceding the designated day, being a contract whose time of provision of the services cannot be determined in advance owing to the nature of the contract and that is specified by Cabinet Order as a contract under which all or part of the consideration is paid in installments prior to the provision of the services, and the terms of the contract satisfy the following requirements, the consumption tax on the provision of those services is at the rate prescribed in Article 29 of the Former Consumption Tax Act; provided, however, that this does not apply if the amount of consideration for the provision of those services was changed on or after the designated day.

⑥In the application of Article 38, paragraph (1) (Deduction of Amount of Consumption Tax When Refunds, etc. of Consideration for Sales Are Made) and Article 39, paragraph (1) (Deduction, etc. of Amount of Consumption Tax Relating to Bad Debts) of the New Consumption Tax Act to a taxable transfer, etc. of assets to which paragraphs (1) through (3), the main clause of paragraph (4) or the main clause of the preceding paragraph applies, the phrase "5/100" in Article 38, paragraph (1) of the New Consumption Tax Act is deemed to be replaced with "3/100" and "4/105" with "3/103", and the phrase "4/105" in Article 39, paragraph (1) of the New Consumption Tax Act is deemed to be replaced with "3/103".

⑦In the application of Article 30, paragraph (1) (Deduction of Amount of Consumption Tax on Purchases), Article 32, paragraph (1) (Special Provisions on Deduction of Amount of Consumption Tax on Purchases When Refunds, etc. of Consideration for Purchases Are Received) and Article 36, paragraph (1) (Adjustment of Amount of Consumption Tax on Inventory When Exemption from Tax Liability Ceases to Apply, etc.) of the New Consumption Tax Act where a business operator has acquired or leased, from a business operator to which paragraphs (1) through (3), the main clause of paragraph (4) or the main clause of paragraph (5) has applied, assets relating to a taxable transfer, etc. of assets to which those provisions have applied, or has received the provision of services relating to that taxable transfer, etc. of assets, the phrase "4/105" in those provisions is deemed to be replaced with "3/103".

⑧If a business operator has made a taxable transfer, etc. of assets to which paragraph (3) or the main clause of paragraph (4) has applied, the business operator is to notify the counterparty in writing that the taxable transfer, etc. of assets is one to which those provisions have applied.

①If a business operator has applied Article 15, paragraph (1) (Special Provisions on the Time of Transfer, etc. of Assets Relating to Instalment Sales or Similar Transactions) of the Consumption Tax Act to an instalment sale or similar transaction of inventory or services prescribed in that paragraph conducted before the application date, and there are installments of that instalment sale or similar transaction whose payment due dates arrive on or after the application date, the consumption tax on the taxable transfer, etc. of assets relating to the portion corresponding to those installments is at the rate prescribed in Article 29 (Tax Rates) of the Former Consumption Tax Act.

②The provisions of paragraph (6) of the preceding Article apply mutatis mutandis to the case where the preceding paragraph applies.

①If a business operator has applied Article 16, paragraph (1) (Special Provisions on the Time of Transfer, etc. of Assets Relating to Sales on Deferred Payment Terms) of the Consumption Tax Act to a sale on deferred payment terms prescribed in that paragraph conducted before the application date, and there are installments of that sale on deferred payment terms whose payment due dates arrive on or after the application date, the consumption tax on the taxable transfer, etc. of assets relating to the portion corresponding to those installments is at the rate prescribed in Article 29 (Tax Rates) of the Former Consumption Tax Act.

②The provisions of Article 10, paragraph (6) of the Supplementary Provisions apply mutatis mutandis to the case where the preceding paragraph applies.

①If a business operator, under a contract for the undertaking of long-term construction prescribed in Article 17, paragraph (1) (Special Provisions on the Time of Transfer, etc. of Assets Relating to Contracts for Long-Term Construction) of the Consumption Tax Act concluded during the period from the designated day to the day preceding the application date, delivers the subject matter of the contract on or after the application date, and there is, with respect to the amount of consideration for that long-term construction, an amount accounted for by the percentage-of-completion method prescribed in that paragraph in the year or business year that includes the application date or an earlier year or business year, and the business operator applies that paragraph, the consumption tax on the taxable transfer, etc. of assets relating to the portion of the subject matter of that long-term construction that relates to the amount calculated, as provided by Cabinet Order, as the amount of consideration for the part corresponding to the period from the day on which that long-term construction was commenced to the day preceding the application date is at the rate prescribed in Article 29 (Tax Rates) of the Former Consumption Tax Act.

②The provisions of Article 10, paragraph (6) of the Supplementary Provisions apply mutatis mutandis to the case where the preceding paragraph applies.

③The provisions of Article 10, paragraph (7) of the Supplementary Provisions apply mutatis mutandis to the case where a business operator has taken delivery, from a business operator to which paragraph (1) has applied, of subject matter to which that paragraph has applied (limited to the portion of the amount of consideration for the subject matter so delivered that relates to the amount to which that paragraph applied).

④If a business operator has delivered subject matter to which paragraph (1) has applied, the business operator is to notify the counterparty in writing that the delivery of the subject matter is one to which that paragraph has applied, and of the amount of consideration for the portion to which that paragraph has applied.

①If, with regard to a taxable transfer, etc. of assets made before the application date by an individual business operator under Article 18, paragraph (1) (Special Provisions on the Time, etc. of Transfer, etc. of Assets by Small-Scale Business Operators) of the Consumption Tax Act, the day on which the amount of consideration for that taxable transfer, etc. of assets was received is on or after the application date, the consumption tax on that taxable transfer, etc. of assets is at the rate prescribed in Article 29 (Tax Rates) of the Former Consumption Tax Act.

②The provisions of Article 10, paragraph (6) of the Supplementary Provisions apply mutatis mutandis to the case where the preceding paragraph applies.

③If, with regard to a taxable purchase made before the application date by an individual business operator under Article 18, paragraph (1) of the Consumption Tax Act, the day on which the expenses for that taxable purchase were paid is on or after the application date, the provisions then in force continue to govern the deduction, etc. of the amount of consumption tax on purchases under Articles 30 through 36 (Deduction, etc. of Amount of Consumption Tax on Purchases) of the New Consumption Tax Act relating to that taxable purchase.

If a business operator, with respect to a taxable purchase made in Japan before the application date, receives on or after the application date a refund, etc. of consideration for purchases prescribed in Article 32, paragraph (1) (Special Provisions on Deduction of Amount of Consumption Tax on Purchases When Refunds, etc. of Consideration for Purchases Are Received) of the New Consumption Tax Act, the provisions then in force continue to govern the computation of the deduction of consumption tax on purchases under the provisions of that Article for that refund, etc. of consideration for purchases.

①If a business operator prescribed in Article 36, paragraph (1) (Adjustment of Amount of Consumption Tax on Inventory When Exemption from Tax Liability Ceases to Apply, etc.) of the New Consumption Tax Act holds, on or after the application date, inventory relating to a taxable purchase acquired in Japan before the application date, or taxable goods taken out of a bonded area before the application date that fall under inventory, the provisions then in force continue to govern the adjustment of consumption tax under the provisions of that paragraph for the inventory relating to that taxable purchase or those taxable goods that fall under inventory.

②The provisions of the preceding paragraph apply mutatis mutandis to the case where an individual business operator or corporation under Article 36, paragraph (3) of the New Consumption Tax Act succeeds to the business of the decedent or merged corporation referred to in that paragraph. In this case, in the preceding paragraph, the phrase "Article 36, paragraph (1) (Adjustment of Amount of Consumption Tax on Inventory When Exemption from Tax Liability Ceases to Apply, etc.)" is deemed to be replaced with "Article 36, paragraph (3)", the phrase "business operator" with "individual business operator or corporation", the phrase "in Japan" with "by the decedent or merged corporation referred to in Article 36, paragraph (3) in Japan", and the phrase "a bonded area" with "a bonded area by the decedent or merged corporation referred to in Article 36, paragraph (3)".

③The provisions of paragraph (1) apply mutatis mutandis to the case where a business operator under Article 36, paragraph (5) of the New Consumption Tax Act comes to be exempt from the obligation to pay consumption tax under the provisions of Article 9, paragraph (1), main clause (Exemption from Tax Liability of Small-Scale Business Operators) of the New Consumption Tax Act.

①The provisions of Article 37, paragraph (1) (Special Provisions on Deduction of Amount of Consumption Tax on Purchases by Small and Medium Sized Business Operators) of the New Consumption Tax Act apply to taxable periods that begin on or after the application date, and the provisions then in force continue to govern taxable periods that began before the application date.

②A written notification under the provisions of Article 37, paragraph (1) of the Former Consumption Tax Act that was submitted before the application date is deemed to be a written notification under the provisions of Article 37, paragraph (1) of the New Consumption Tax Act, and the provisions of that Article apply.

If a business operator prescribed in Article 38, paragraph (1) (Deduction of Amount of Consumption Tax When Refunds, etc. of Consideration for Sales Are Made) of the New Consumption Tax Act, with respect to a taxable transfer, etc. of assets made in Japan before the application date, makes on or after the application date a refund, etc. of consideration for sales prescribed in that paragraph, the provisions then in force continue to govern the deduction of consumption tax under the provisions of that Article for that refund, etc. of consideration for sales.

If, with respect to accounts receivable or other claims relating to a taxable transfer, etc. of assets made in Japan before the application date by a business operator prescribed in Article 39, paragraph (1) (Deduction, etc. of Amount of Consumption Tax Relating to Bad Debts) of the New Consumption Tax Act, the facts prescribed in that paragraph have occurred and, as a result, it has become impossible on or after the application date to collect all or part of the tax-inclusive price of that taxable transfer, etc. of assets referred to in that paragraph, the provisions then in force continue to govern the deduction, etc. of consumption tax under the provisions of that Article for the taxable transfer, etc. of assets for which collection has become impossible.

With regard to a taxable period prescribed in Article 40, paragraph (1) (Marginal Deduction for Small-Scale Business Operators, etc.) of the Former Consumption Tax Act that began before the application date for a business operator prescribed in that paragraph, the provisions of that Article, and of Article 43 (Matters to Be Stated in an Interim Return When Provisional Settlement of Accounts Is Made, etc.) and Article 45 (Final Return for Taxable Transfers, etc. of Assets) of the Former Consumption Tax Act, remain in force. In this case, with regard to a taxable period prescribed in that paragraph for a business operator under Article 40, paragraph (1) of the Former Consumption Tax Act that began before the application date and ends on or after the application date, the phrase "amount" in that paragraph is deemed to be replaced with "amount (if that amount exceeds the sum of the amount calculated by dividing 100,000 yen by 12 and multiplying the result by the number of months in the period from the first day of that taxable period to March 31, 1997 (hereinafter in this paragraph referred to as the "number of months before the application date") and the amount calculated by dividing 80,000 yen by 12 and multiplying the result by the number of months obtained by deducting the number of months before the application date from the number of months in that taxable period, that sum)", and the phrase "the preceding paragraph" in paragraph (4) of that Article with "paragraph (1) and the preceding paragraph".

①The provisions of Article 42 (Interim Return for Taxable Transfers, etc. of Assets) and Article 43 (excluding paragraph (4)) (Matters to Be Stated in an Interim Return When Provisional Settlement of Accounts Is Made, etc.) of the New Consumption Tax Act apply where the taxable period prescribed in Article 42, paragraph (1), (4), (6) or (8) of the New Consumption Tax Act begins on or after the application date, and the provisions then in force continue to govern where that taxable period began before the application date.

②The provisions of Article 43, paragraph (4) of the New Consumption Tax Act apply where, for an interim filing period prescribed in paragraph (1) of that Article the last day of which is on or after the application date, the interim return prescribed in that paragraph is filed for that interim filing period.

③Where, in a taxable period ending on or after the application date (where an interim filing period prescribed in Article 43, paragraph (1) of the New Consumption Tax Act is deemed to be one taxable period under the provisions of that paragraph, that interim filing period the last day of which is on or after the application date; the same applies hereinafter in this paragraph), a taxable transfer, etc. of assets is made to which, by the provisions of these Supplementary Provisions, the tax rate prescribed in Article 29 (Tax Rates) of the Former Consumption Tax Act applies, with regard to a return for that taxable period under the provisions of Article 42, paragraph (1), (4), (6) or (8) of the New Consumption Tax Act that states the matters set forth in the items of Article 43, paragraph (1) of the New Consumption Tax Act, and a return under the provisions of Article 45, paragraph (1) (Final Return for Taxable Transfers, etc. of Assets) of the New Consumption Tax Act, the phrase "total of the amounts of the tax base" in Article 43, paragraph (1), item (i) and Article 45, paragraph (1), item (i) of the New Consumption Tax Act is deemed to be replaced with "amounts of the tax base classified by each different tax rate and the total thereof", and the phrase "tax base amount" in Article 43, paragraph (1), item (ii) and Article 45, paragraph (1), item (ii) of the New Consumption Tax Act with "tax base amount classified by each different tax rate".

④The provisions of Article 45, paragraph (5) and Article 46, paragraph (3) (Return to Receive a Refund) of the New Consumption Tax Act apply where the returns prescribed in those provisions are provided for taxable periods ending on or after the application date.

①If, with respect to a taxable transfer, etc. of assets made before the application date by the national government or a local government to which the provisions of Article 60, paragraph (2) (Special Provisions for the National Government, Local Governments, etc.) of the Consumption Tax Act apply, the last day of the fiscal year in which the consideration for that taxable transfer, etc. of assets is to be received is on or after the application date, the consumption tax on that taxable transfer, etc. of assets is at the rate prescribed in Article 29 (Tax Rates) of the Former Consumption Tax Act.

②The provisions of Article 10, paragraph (6) of the Supplementary Provisions apply mutatis mutandis to the case where the provisions of the preceding paragraph apply.

③If, with respect to a taxable purchase made before the application date by the national government or a local government to which the provisions of Article 60, paragraph (2) of the Consumption Tax Act apply, the last day of the fiscal year in which the expense of that taxable purchase is to be paid is on or after the application date, the provisions then in force continue to govern the deduction, etc. of consumption tax on purchases for that taxable purchase under the provisions of Articles 30 through 36 (Deduction, etc. of Amount of Consumption Tax on Purchases) of the New Consumption Tax Act and Article 60, paragraphs (4) and (5) of the New Consumption Tax Act.

④Transitional measures concerning a taxable transfer, etc. of assets and a taxable purchase made before the application date by a corporation prescribed in Article 60, paragraph (3) of the Consumption Tax Act to which the provisions of that paragraph apply are specified by Cabinet Order, in accordance with the provisions of the preceding three paragraphs.

With regard to the application of penal provisions to acts committed before the enforcement of the provisions of Article 3 and to acts committed after the enforcement of the provisions of that Article concerning consumption tax for which the provisions then in force are to continue to govern under the provisions of these Supplementary Provisions, the provisions then in force continue to govern.

In addition to what is provided for in Article 7 through the preceding Article of the Supplementary Provisions, transitional measures concerning books, etc. sold by subscription and other transitional measures necessary for the enforcement of the provisions of Article 3 are specified by Cabinet Order.

Regarding the tax rate of consumption tax, a review is to be conducted, comprehensively taking into account the perspective of securing financial resources for the expenses required for social security, etc., the state of progress in the reform of administration and finance, the state of making special taxation measures, etc. and taxation relating to consumption tax appropriate, the fiscal situation, etc., and if it is found necessary, necessary measures are to be taken by September 30, 1996.