Page 380 - Juta's Indirect Tax

IN 40 (2) VaLue-added tax act: InterPretatIOn nOtes IN 40 (2)
b.
clearing the imported movable goods for importation into the Republic and paying the VAT levied by SARS Customs in terms of s 7(1)(b), and then supplying the imported movable goods, at either:
i. the standard rate in terms of s 7(1)(a), where the CCAE Rebate Stockist/Manufacturer/IDZ Operator or the CCAE Rebate Stockist/Manufacturer/IDZ Operator’s cartage contractor collects the imported movable goods from the RSA Storage Warehouse (ie delivery takes place outside the CCA), and accounting for output tax on the supply in the relevant VAT return; or
ii. the zero rate in terms of s 11(1)(m), where the RSA Storage Warehouse or a cartage contractor appointed by the RSA Storage Warehouse physically delivers the imported movable goods to the CCAE Rebate Stockist/ Manufacturer/IDZ Operator in the CCA.
VAT implications for the CCAE Rebate Stockist/Manufacturer/IDZ Operator
Section 11(1)(u)
The supply is zero-rated in terms of s 11(1)(u) as the imported movable goods are not entered for home consumption.
The subsequent entry of the imported movable goods for home consumption will be exempt from VAT in terms of s 13(3), read with Item 498.01/00.00/01.00 (or Item 498.01/00.00/02.00 in the case of an IDZ Operator) in para 8 of Schedule 1 where the CCAE Rebate Stockist/Manufacturer/IDZ Operator intends to import and enter the imported movable goods for home consumption into a CCA.
Sections 11(1)(m), or exemption in terms of s 13(3)
There are no VAT implications where the supply was zero-rated in terms of s 11(1)(m) or the goods were exempt on importation in terms of s 13(3), unless the CCAE Rebate Stockist/Manufacturer/IDZ Operator acquired such goods for the purposes of which a deduction of input tax would have been denied in terms of s 17(2), or the goods are not wholly for consumption, use or supply in the course of making taxable supplies. In this instance, such goods are deemed to be supplied by the CCAE Rebate Stockist/Manufacturer/IDZ Operator in terms of s 18(10). An output tax adjustment must be made in the same tax period in which such goods were acquired. See para 6.
Section 7(1)(a) or (b)
VAT levied in terms of s 7(1)(a) or (b) on the acquisition of the goods may be deducted to the extent it constitutes ‘input tax’ as de ned in s 1, subject to sections 16(3)(a)(i), 16(2), 17 and 20.
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 is required to issue a tax invoice to the CCAE Rebate Stockist/Manufacturer at either— a. the zero rate in terms of s 11(1)(u);
b. the standard rate in terms of s 7(1)(a); or
c. the zero rate in terms of s 11(1)(m).
• The RSA Storage Warehouse must issue a delivery note or other document indicating that VAT was levied at either the standard rate or 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 where the zero rate is applied.
5.3 Supply of imported movable goods by a CCAE Storage Warehouse to a RSA Storage Warehouse
Customs treatment
Clearance of goods for re-warehousing in bond. This clearance only applies to goods which are subject to duty (SAD 500 and SAD 502 – E 43-40, or E 43-41, or E 43-44/E 44-43).
VAT implications for the CCAE Storage Warehouse
The CCAE 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 RSA Storage Warehouse before the goods are entered for home consumption.
VAT implications for the RSA 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 exit the CCA:
• The CCAE Storage Warehouse must issue a tax invoice to the RSA Storage Warehouse at the zero rate.
• The CCAE Storage Warehouse must issue a delivery note or other document indicating that VAT was levied at the zero rate in order to facilitate the exit of the goods from the CCA where a tax invoice is not issued at the time the goods exit
the CCA.
• The CCA Storage Warehouse must obtain and retain the documentary proof required in terms of s 11(3), read with
IN31.
5.4 Supply of movable goods by a Foreign Supplier to a CCAE Rebate Stockist/Manufacturer/IDZ Operator where the movable goods are imported and entered into a CCA
Customs treatment
Clearance of goods for importation for home consumption under rebate of duty.
CCAE Rebate Stockist/Manufacturer: SAD 500 – Rebate Item 498.01 – J 80-00, or J 80-20.
IDZ Operator: SAD 500 – Rebate Item 498.02 – J 80-00, or J 80-20.
In the case of goods imported from Botswana, Lesotho, Namibia or Swaziland: SAD 500 – D 37-00, SAD 502 transit
and subsequently SAD 500 – Rebate Item 498.01/02) – J 80-00.
VAT implications for the Foreign Supplier
There are no VAT implications.
VAT implications for the CCAE Rebate Stockist/Manufacturer/IDZ Operator
CCA Rebate Stockist/Manufacturer
The importation of the movable goods is exempt from VAT in terms of s 13(3), read with Item 498.01/00.00/01.00 in para 8 of Schedule 1.
372 Juta’s IndIrect tax 2016