Page 388 - Juta's Indirect Tax

IN 40 (2) VaLue-added tax act: InterPretatIOn nOtes IN 40 (2)
a. b.
standard rate in terms of s 7(1)(a), where the CCAE Rebate Stockist/Manufacturer or the CCAE Rebate Stockist/ Manufacturer’s cartage contractor collects the goods from the CCAE Storage Warehouse; or
zero rate in terms of s 11(1)(m), where the CCAE Storage Warehouse or a cartage contractor appointed by the CCAE Storage Warehouse physically delivers the goods.
VAT implications for the CCAE Rebate Stockist/Manufacturer
VAT levied at the zero rate
There are no VAT implications for the CCAE Rebate Stockist/Manufacturer where VAT was levied at the zero rate,
unless the goods are acquired 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, the goods are deemed to be supplied by the CCAE Rebate Stockist/Manufacturer in terms of s 18(10). An output tax adjustment must be made in the same tax period in which the goods were acquired. See para 6.
VAT levied at the standard rate
The CCAE Rebate Stockist/Manufacturer is entitled to deduct the VAT levied at the standard rate on the acquisition of the goods to the extent it quali es as ‘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 are supplied (in the case of the same CCA) or exit the CCA and enter another CCA (in the case of a different CCA):
• The CCAE Storage Warehouse must issue a tax invoice to the CCAE Rebate Stockist/Manufacturer as follows—
i. at the zero rate in terms of s 11(1)(u) where the imported movable goods are supplied before being entered for home consumption;
ii. where the imported movable goods are entered for home consumption— a. at the standard rate in terms of s 7(1)(a); or
b. at the zero rate in terms of s 11(1)(m).
• The CCAE 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 exit of the goods from the CCA in order to facilitate the exit of the goods from the CCA where a tax invoice has not been issued at the time the goods move within or exit the CCA and enter another CCA.
• The CCAE Storage Warehouse must complete a VAT267 form when the imported movable goods are supplied (in the case of the same CCA) or exit the CCA in the case of a different CCA.
• The CCAE 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.
5.24 Supply of movable goods in terms of a rental agreement, charter party or agreement for chartering by a Supplying CCAE to a Receiving CCAE for exclusive use in the same CCA or another CCA
Customs treatment
No Customs treatment. Movement of goods in free circulation.
VAT Implications for the Supplying CCAE
The Supplying CCAE must levy VAT at the zero rate on the supply of the movable goods in terms of s 11(1)(c).
In applying the zero rate the Supplying CCAE must obtain and retain the relevant documentary proof as determined
in terms of s 11(3), read with IN31.
It is important to note that s 11(1)(c) excludes the supply of a ‘motor car’ as de ned in s 1. The supply of a ‘motor car’
to a CCAE/IDZ Operator is therefore always subject to VAT at the standard rate in terms of s 7(1)(a).
VAT implications for the Receiving CCAE
Goods acquired for the purposes of which a deduction of input tax would have been denied in terms of s 17(2), or
goods not wholly for consumption, use or supply in the course of making taxable supplies are deemed to be supplied by the Receiving CCAE in terms of s 18(10). The Receiving CCAE must make an output tax adjustment in the same tax period in which such goods were acquired. See para 6.
Documentation to be available for VAT purposes for submission to the IDZ Operator at the time the goods are supplied (in the case of the same CCA) or exit the CCA and enter another CCA (in the case of a different CCA):
• The Supplying CCAE must issue a tax invoice at the zero rate.
• The Supplying CCAE must issue a delivery note or other document indicating that VAT was levied at the zero rate
in order to facilitate the movement of the goods within the same CCA or on exiting one CCA to enter another CCA
where a tax invoice has not been issued at the time the goods move within or exit the CCA.
• The Supplying CCAE must complete a VAT267 form when the movable goods are supplied within the same CCA, or
for when the goods exit and enter another CCA.
• The Supplying CCAE must obtain and retain the documentary proof required in terms of s 11(3), read with IN31. 5.25 Supply of services by a Supplying CCAE which are physically rendered to a Receiving CCAE in the same
CCA or another CCA
VAT implications for the Supplying CCAE
The supply is subject to VAT at the zero rate in terms of s 11(2)(k) as the Supplying CCAE physically renders the services in a CCA.
VAT implications for the Receiving CCAE
There are no VAT implications for the Receiving CCAE where VAT was levied at the zero rate, unless the services are acquired for the purposes of which a deduction of input tax would have been denied in terms of s 17(2), or the services are not wholly for the consumption, use or supply in the course of making taxable supplies. In this instance, the services are deemed to be supplied by the Receiving CCAE in terms of s 18(10). An output tax adjustment must be made in the same tax period in which the goods were acquired. See para 6.
Documentation to be available for VAT purposes for submission to the IDZ Operator at the time the services are physically rendered within the same CCA or in another CCA:
380 Juta’s IndIrect tax 2016