Page 402 - Juta's Indirect Tax

IN 41 (3) VaLue-added tax act: InterPretatIOn nOtes IN 41 (3)
4. Conclusion
This Note sets out the VAT implications of the various supplies made by and to a vendor in the gambling industry. It contains, for ease of reference, an extract from Binding General Ruling No. 13, which allows VAT to be calculated using the net drop method, subject to certain conditions being met.
Should any person require further clarity on any of the matters dealt with in this Note, it is recommended that an application for a VAT ruling be made as envisaged in section 41B read with Chapter 7 of the Tax Administration Act No. 28 of 2011 (the TA Act). A VAT 301 application form together with supporting documents should be submitted to SARS by email to VATRulings@sars.gov.za or facsimile on 086 540 9390. The application should be headed ‘Application for a VAT Class Ruling’ or ‘Application for a VAT Ruling” and it must meet all the requirements as set out in section 79 of the TA Act.
Annexure A– The law Section 1(1) – De nitions
“consideration”, in relation to the supply of goods or services to any person, includes any payment made or to be made (including any deposit on any returnable container and tax), whether in money or otherwise, or any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of any goods or services, whether by that person or by any other person, but does not include any payment made by any person as a donation to any association not for gain: Provided that a deposit (other than a deposit on a returnable container), whether refundable or not, given in respect of a supply of goods or services shall not be considered as payment made for the supply unless and until the supplier applies the deposit as consideration for the supply or such deposit is forfeited; “consideration in money” includes consideration expressed as an amount of money;
“enterprise” means—
(a) in the case of any vendor other than a local authority, any enterprise or activity which is carried on continuously or
regularly by any person in the Republic or partly in the Republic and in the course or furtherance of which goods or services are supplied to any other person for a consideration, whether or not for pro t, including any enterprise or activity carried on in the form of a commercial, nancial, industrial, mining, farming, shing or professional concern or any other concern of a continuing nature or in the form of an association or club;
“input tax”, in relation to a vendor, means—
(a) tax charged under section 7 and payable under that section by—
(i) a supplier on the supply of goods or services made by that supplier to the vendor; or (ii) the vendor on the importation of goods by him; or
(iii) the vendor under the provisions of section 7(3);
...
where the goods or services concerned are acquired by the vendor wholly for the purpose of consumption, use or supply in the course of making taxable supplies or, where the goods or services are acquired by the vendor partly for such purpose, to the extent (as determined in accordance with the provisions of section 17) that the goods or services concerned are acquired by the vendor for such purpose;
“services” means anything done or to be done, including the granting, assignment, cession or surrender of any right or the making available of any facility or advantage, but excluding a supply of goods, money or any stamp, form or card contemplated in paragraph (c) of the de nition of “goods”;
Section 8(13) and (13A) – Certain supplies of goods or services deemed to be made or not made
Section 9(3)(e) – Time of supply
Section 16(3) – Calculation of tax payable
(13) For the purposes of this Act, where any person bets an amount on the outcome of a race or on any other event or occurrence, the person with whom the bet is placed shall be deemed to supply a service to such rst-mentioned person. (13A) For the purposes of this Act, except section 16(3), where any vendor who makes taxable supplies of services contemplated in subsection (13) of this section, receives any amount paid by any other vendor as a prize or winnings in consequence of a supply of such services made by the last-mentioned vendor to the rst-mentioned vendor, the rst-mentioned vendor shall be deemed to supply a service to the last-mentioned vendor.
(3) Notwithstanding anything in subsection (1) or (2) of this section—
...
(e) where any supply of a service is deemed to be made as contemplated in section 8 (13), the service shall be deemed
to be supplied to the extent that payment of any amount of the bet is made, and each such supply shall be deemed to take place whenever any payment in respect of such supply is received by the supplier;
(3) Subject to the provisions of subsection (2) of this section and the provisions of sections 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 subsection (4), and the amounts (if any) received by the vendor during that period by way of refunds of tax charged under section 7(1)(b) and (c) and 7(3)(a), the following amounts, namely—
(a) ...
Provided that this paragraph does not apply where a vendor acquires goods or services that are to be awarded as a prize or winnings and in respect of which that vendor quali es or will qualify for a deduction under paragraph (d);
394 Juta’s IndIrect tax 2016