Page 392 - Juta's Indirect Tax

IN 40 (2) VaLue-added tax act: InterPretatIOn nOtes IN 40 (2) Section 11(2)(k) – Zero-rating (services)
Section 13(3) – Collection of VAT on importation of goods Section 16(3)(n) – Calculation of tax payable
(2) Where, but for this section, a supply of services would be charged with tax at the rate referred to in s 7(1), such supply of services shall, subject to compliance with sub-s (3) of this section, be charged with tax at the rate of zero per cent where—
.. .
(k) the services are physically rendered elsewhere than in the Republic or to a customs controlled area enterprise or
an IDZ Operator in a customs controlled area; or
(3) The importation of the goods set forth in Schedule 1 to this Act is exempt from the tax imposed in terms of s 7(1)(b).
(3) Subject to the provisions of sub-s (2) of this section and the provisions of ss 15 and 17, the amount of tax payable in respect of a tax period shall be calculated by deducting from the sum of the amounts of output tax of the vendor which are attributable to that period, as determined under sub-s (4), and the amounts (if any) received by the vendor during that period by way of refunds of tax charged under s 7(1)(b) and (c) and 7(3)(a), the following amounts, namely—
(n)
.. .
an amount equal to the tax fraction of the lesser of the amount contemplated in s 10(25) or the open market value of the movable goods on the date—
(i) those goods are returned to the customs controlled area enterprise or IDZ Operator; or
(ii) those goods are supplied by the customs controlled area enterprise or IDZ Operator where those goods are
supplied after the relevant prescribed time period contemplated in s 8(24):
Section 18(10) – Adjustments
(10) Where—
(a) goods or services have been supplied by a vendor at the zero rate in terms of sections 11(1)(c), 11(1)(m), 11(1)
(mA) or 11(2)(k) to a vendor, being a customs controlled area enterprise or an IDZ Operator; or
(b) goods have been imported into the Republic by a vendor, being a customs controlled area enterprise or an IDZ
Operator and those goods are exempt from tax in terms of s 13(3),
and where a deduction of input tax would have been denied in terms of s 17(2), and to the extent that such goods or services are not wholly for consumption, use or supply within a customs controlled area in the course of making taxable supplies by that vendor, being a customs controlled area enterprise or an IDZ Operator, those goods or services shall be deemed to be supplied by the vendor concerned in the same tax period in which they were so acquired, in accordance with the formula:
A ×B
in which formula—
‘A’ represents the rate of tax levied in terms of s 7(1); and
‘B’ represents—
(i) the cost to the vendor of the acquisition of those goods or services which were supplied to him in terms of sections 11(1)(c), 11(1)(m), 11(1)(mA) or 11(2)(k); or
(ii) the value to be placed on the importation of goods into the Republic as determined in terms of s 13(2).
Item 498.00 in para 8 of Schedule 1 to the VAT Act – Exemption: Certain goods imported into the Republic
498.00 IMPORTED GOODS FOR USE IN A CUSTOMS CONTROLLED AREA NOTES:
1. Goods may only be imported and entered into a customs controlled area under this item where such goods are imported by a customs controlled area enterprise or an IDZ Operator.
2. Notwithstanding other paragraphs or items provided for in this Schedule, goods may only be imported and entered into a customs controlled area under item 498.00, with the exception of any goods imported for storage in a licensed Customs and Excise storage warehouse located in a customs controlled area enterprise which may not be entered under item 498.00.
498.01/00.00/01.00 Goods that are imported into a customs controlled area by a customs controlled area enterprise
498.02/00.00/01.00 Goods that are imported into a customs controlled area by an IDZ Operator for use in the
construction and maintenance of the infrastructure of a customs controlled area
384 Juta’s IndIrect tax 2016