Page 362 - Juta's Indirect Tax

IN 39 (2) VaLue-added tax act: InterPretatIOn nOtes IN 39 (2)
• Section 11 (2) (s)
This provision was inserted with effect from 1 April 2005 to provide a zero-rating of the deemed supply which arises in respect of the receipt of a low cost housing subsidy payment.
• Section 11 (2) (n)
A textual amendment was made to this provision as a result of a ‘welfare organisation’ being included in the de nition of a ‘designated entity’ with effect from 1 April 2005.
• Section 11 (2) (u)
This provision was inserted to provide a zero-rating in respect of the receipt of training grant by a designated entity in terms of the Skills Development Act, 1998.
Section 18 (4) – Change in use adjustments
• Proviso (iv) to section 18 (4)
Proviso (iv) was inserted to deny an input tax adjustment relating to assets acquired by non-taxable public authorities and certain public entities before 1 April 2005 which were applied for enterprise purposes after that date if that entity is re-classi ed in terms of the PFMA as a taxable entity.
Section 23 (4) – Registration of persons making supplies in the course of enterprises
• Proviso to section 23 (4)
A proviso was inserted to provide that certain public entities would not be liable for VAT on transactions before 1 April 2005 if they were liable to register before that, but did not do so.
(s) the services are deemed to be supplied to a public authority or municipality in terms of section 8 (23).’
(n) the services comprise the carrying on by a welfare organization of the activities referred to in the de nition of ‘welfare organization’ in section 1 and to the extent that any payment in respect of those services is made in terms of section 8 (5) those services shall be deemed to be supplied by that organisation to a public authority or municipality.
(u) the services are deemed to be supplied in terms of section 8 (5) by a designated entity in respect of any payment made in terms of section 10 (1) (f) of the Skills Development Act, 1998 (Act 97 of 1998), to that designated entity.
(iv) this subsection shall not apply where a constitutional institution listed in Schedule 1 or a public entity listed in Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act 1 of 1999), is re-classi ed within the Schedules to the Public Finance Management Act, 1999 (Act 1 of 1999) and applies those goods or services for the purposes of consumption, use or supply in the course of making taxable supplies.
(4)
(a) (b)
Where any person has—
applied for registration ... subsection (2) or (3) ..., that person shall be a vendor ...with effect from such date as
the Commissioner may determine;
not applied for registration in terms of subsection (2) and the Commissioner is satis ed that that person is
liable to be registered ..., that person shall be a vendor ... with effect from the date on which that person rst became liable to be registered in terms of this Act: Provided that the Commissioner may, having regard to the circumstances of the case, determine that person to be a vendor from such later date as the Commissioner may consider equitable.
Provided that where that person is a public entity listed in Schedule 1 or Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999), which was liable to be registered as a vendor for any supplies made on or before 31 March 2005, but did not register before 1 April 2005, the Commissioner must not register that person in respect of those supplies.
Section 40A – Liability of public authorities and certain public entities for tax and limitation of refunds
This provision was inserted to provide relief in regard to the incorrect treatment of transfer payments before 1 April 2005.
(1) This section applies in respect of the supply of goods or services on or before 31 March 2005 by any public authority or public entity listed in Schedule 1 or Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act 1 of 1999).
(2) Where the Commissioner on or before 31 March 2005 issued an assessment for an amount of tax or additional tax in respect of any supply of goods or services contemplated in subsection (1), to correct a prior incorrect application of the zero per cent rate of tax in terms of section 11 (2) (p) in respect of that supply, the Commissioner must, on written application, reduce that assessment to the extent that the amount of tax, additional tax penalty or interest arose as a result of that correction and was not yet paid on that date: Provided that the reduced assessment will not result in a refund to that public authority or public entity.
354
Juta’s IndIrect tax 2016