Page 379 - Juta's Indirect Tax

IN 40 (2) VaLue-added tax act: InterPretatIOn nOtes IN 40 (2)
• The entry of movable goods into a licensed Customs and Excise storage warehouse, whether the warehouse is located inside a CCA or outside a CCA but within the Republic, means that the goods are not entered for home consumption.
• The entry of imported movable goods into a licensed Customs and Excise manufacturing warehouse, whether the warehouse is located inside a CCA or outside a CCA but within the Republic, means goods which are entered for
home consumption.
• Imported movable goods may not be supplied or moved from a licensed Customs and Excise manufacturing warehouse
(whether in the Republic or in a CCA) to a licensed Customs and Excise storage warehouse (whether in the Republic or in a CCA). The rationale for this limitation is that imported movable goods cannot change its status from being entered for home consumption to not being entered for home consumption.
• Imported goods supplied and moved from a licensed Customs and Excise storage warehouse to a licensed Customs and Excise manufacturing warehouse (that is, as indicated by Customs Procedure Codes J80-40, J80-41 or J80-44), are regarded as being entered for home consumption. The VAT implications are as follows, in the case of—
(a) imported movable goods which are to remain within a CCA, the entry is exempt from VAT; and
(b) imported movable goods moving out of a CCA to the Republic, the VAT implications depend on whether the goods
are sold before or after being cleared for home consumption.
Supplies to a CCAE/IDZ Operator by a vendor
• The zero-rating provisions only apply to goods supplied and physically delivered, and services physically supplied to a CCAE/IDZ Operator in a CCA.
• The supply by a vendor of xed property situated in a CCA to a CCAE/IDZ Operator is subject to VAT at the zero rate. • The supply by a vendor of movable goods, where delivery of the goods takes place outside of a CCA but in the
Republic, or services supplied outside a CCA to a CCAE/IDZ Operator is subject to VAT at the standard rate.
• It should be noted that locally supplied goods cannot be warehoused in a licensed Customs and Excise storage warehouse. This is on the basis that goods in a licensed Customs and Excise storage warehouse are not yet entered for
home consumption, and therefore cannot be supplied in the Republic as free circulation goods.
Importation of goods by a CCAE or an IDZ Operator
• Goods imported into a CCA by a CCAE are exempt from VAT on importation.
• Goods imported into a CCA by an IDZ Operator for use in the construction and maintenance of the infrastructure of
the CCA are also exempt from VAT on importation.
Supplies of goods or services by a CCAE or an IDZ Operator
• The supply of goods physically delivered in a CCA, or the supply of xed property situated in a CCA is zero-rated.
• The supply of services physically supplied in a CCA is zero-rated.
• The normal VAT principles apply in respect of the supply of goods and services to recipients in the Republic, ie the
supply is standard rated, unless it is zero-rated in terms of s 11 or exempt in terms of s 12.
• The normal VAT principles also apply in respect of the export of goods. Where goods are physically delivered to a recipient in an export country, the supply may be zero-rated (refer to IN30 for ‘direct exports’). Where movable goods are supplied and delivered to a recipient in the Republic, VAT at the standard rate must be levied, except in the speci c
circumstances provided for in the Scheme.
5.1 Supply of imported movable goods by a RSA Storage Warehouse to a CCAE Storage Warehouse
Customs treatment
Clearance of goods for re-warehousing in bond (SAD 500 and SAD 502 – E 43-40, E 43-41, or E 43-44/E 44-43).
VAT implications for the RSA Storage Warehouse
The RSA Storage Warehouse must levy VAT on the supply of the imported movable goods at the zero rate in terms of s 11(1)(u), as the imported movable goods are supplied to the CCAE Storage Warehouse before such goods are entered for home consumption.
VAT implications for the CCAE Storage Warehouse
There are no VAT implications.
Documentation to be available for VAT purposes for submission to the IDZ Operator at the time the goods enter the CCA:
• The RSA Storage Warehouse must issue a tax invoice at the zero rate.
• The RSA Storage Warehouse must issue a delivery note or other document indicating that VAT was levied on the
supply at the zero rate in order to facilitate the entry of the goods into the CCA where a tax invoice is not issued at the
time the goods enter the CCA.
• The RSA Storage Warehouse must obtain and retain the documentary proof required in terms of s 11(3), read with
IN31.
5.2 Supply of imported movable goods by a RSA Storage Warehouse to a CCAE Rebate Stockist/Manufacturer/ IDZ Operator
Customs treatment
Clearance of goods ex-warehouse for rebate of duty (SAD 500 – Rebate Item 498.01/02 – J 80-40, or J 80-41 or J 80-44).
VAT implications for the RSA Storage Warehouse
The RSA Storage Warehouse is supplying imported movable goods to a CCAE Rebate Stockist/Manufacturer/IDZ Operator. Therefore, the RSA Storage Warehouse may supply the imported movable goods by either—
Before entry for home consumption
a. levying VAT at the zero rate in terms of s 11(1)(u) where the imported movable goods are supplied to the CCAE
Rebate Stockist/Manufacturer/IDZ Operator before such goods are entered for home consumption (ie the movable
goods remain imported and entered for storage in a licensed Customs and Excise storage warehouse); or
After entry for home consumption
Juta’s IndIrect tax 2016 371