Page 378 - Juta's Indirect Tax

IN 40 (2) VaLue-added tax act: InterPretatIOn nOtes IN 40 (2) 3. The law
The relevant extracts of the VAT Act and the Customs and Excise Act are quoted in Annexure A.
4. Meanings attached to words, phrases and acronyms used in this interpretation note
For the purposes of this interpretation note, unless otherwise indicated, SARS will attach the following interpretation to the words, phrases and acronyms set out below—
• ‘customs control’ means measures applied to ensure compliance with the customs and excise laws and procedures; • ‘CCA’ means a customs controlled area;
• ‘CCAE’ means a customs controlled area enterprise, being a company holding a valid IDZ enterprise permit issued by
the Manufacturing Development Board and a CCAE must be a vendor for VAT purposes (ie an industrial development
zone enterprise);
• ‘CCAE Rebate Manufacturer’ means a CCAE operating a licensed Customs and Excise manufacturing warehouse in a CCA;
• ‘CCAE Rebate Stockist’ means a CCAE operating a special licensed Customs and Excise warehouse in order to
supply registered rebate manufacturers with rebated goods;
• ‘CCAE Storage Warehouse’ means a CCAE operating a licensed Customs and Excise storage warehouse in a CCA;
• ‘Constitution’ means the Constitution of South Africa, 1996;
• ‘Customs and Excise Act’ means the Customs and Excise Act 91 of 1964;
• ‘Foreign Supplier’ means any person resident or conducting business in an export country including Botswana, Lesotho, Namibia and Swaziland;
• ‘IDZ’ means an industrial development zone;
• ‘IDZ Operator’ refers to an industrial development zone operator;
• ‘IN30’ refers to Interpretation Note No. 30 (Issue 2) dated 15 March 2006;
• ‘IN31’ refers to Interpretation Note No. 31 dated 31 March 2012;
• ‘licensed Customs and Excise manufacturing warehouse’ means a warehouse licensed by the Commissioner at any
place appointed for that purpose under the provisions of the Customs and Excise Act, which has been approved by the
Commissioner for the manufacture of goods as may be approved in respect of that warehouse;
• ‘Qualifying Purchaser’ refers to the term ‘qualifying purchaser’ as de ned in the Scheme;
• ‘Receiving Vendor’ means a vendor in the Republic receiving a supply of goods or services;
• ‘Recipient’ means the person to whom the supply of movable goods in terms of a sale or instalment credit agreement is made;
• ‘Republic’ means the Republic of South Africa;
• ‘RSA Rebate Manufacturer’ means a vendor who owns movable goods that are in a licensed Customs and Excise
manufacturing warehouse located in the Republic but outside a CCA;
• ‘RSA Storage Warehouse’ means a vendor who owns movable goods that are in a licensed Customs and Excise
storage warehouse located in the Republic but outside a CCA;
• ‘SARS’ means the South African Revenue Service;
• ‘Scheme’ refers to the Export Incentive Scheme, set out in terms of General Notice 2761 of 1998 (published in
Government Gazette 19471 dated 13 November 1998);
• ‘sections’ refer to sections of the VAT Act;
• ‘standard rate’ refers to VAT levied on a supply of goods or services at the rate of 14% in terms of s 7(1) of the VAT Act;
• ‘Supplying Vendor’ means a vendor in the Republic supplying goods or services to a CCAE or an IDZ Operator;
• ‘VAT’ refers to value-added tax;
• ‘VAT Act’ refers to the Value-Added Tax Act 89 of 1991;
• ‘VRA’referstotheVATRefundAdministrator(Pty)Ltd,beingaprivatecompanyappointedbytheCommissionerto
administer VAT refunds effected in terms of s 44(9);
• ‘zero rate’ refers to VAT levied on a supply of goods or services at the rate of 0% in terms of sections 11(1) or 11(2).
5. Application of the law
The VAT implications concerning the various types of supplies of goods or services to and/or from a CCAE/IDZ Operator located in a CCA of an IDZ are elaborated on below and schematically represented in Annexure B. In certain instances the customs treatment is indicated but to a limited extent. The documentation to be completed for VAT purposes in order to move goods in or out of a CCA or to provide services in a CCA has also been included.
In utilising the schematic representation and the elaboration below, it is essential that the following conditions and general principles are noted:
General
• All persons mentioned in the scenarios below are considered to be vendors in the Republic except for a Foreign Supplier (who is not conducting an ‘enterprise’ as de ned in s 1) or a Foreign Purchaser.
• The movement of movable goods from and to a CCA has a VAT implication only if there is a ‘supply’ of the movable goods as de ned in s 1.
• The application of the zero rate must be substantiated by the relevant documentary evidence. In the instance where a
vendor does not comply with the documentary evidence requirements an adjustment must be made. In this regard, the price charged in respect of the taxable supply of goods or services is in terms of s 64 deemed to include VAT at 14%. For more information regarding documentary proof and adjustments to be made, refer to IN31.
Imported goods
• Goods that were imported and entered for storage in a licensed Customs and Excise storage warehouse, but were not entered for home consumption may be supplied at the zero rate.
370 Juta’s IndIrect tax 2016