Page 403 - Juta's Indirect Tax

IN 41 (3) VaLue-added tax act: InterPretatIOn nOtes
IN 42
(b) ...
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); ...
(d) an amount equal to the tax fraction of any amount paid during the tax period by the supplier of the services
contemplated in section 8(13) as a prize or winnings to the recipient of such services: Provided that where the prize awarded constitutes either goods or services, input tax must be limited to the tax incurred on the initial cost of acquiring those goods or services;
(e) an amount equal to the tax fraction of any amount of tax on totalizator transactions or tax on betting levied and paid for the bene t of any Provincial Revenue Fund by the supplier of the services contemplated in section 8(13);
Section 17(2) – Permissible deductions in respect of input tax
(2) Notwithstanding anything in this Act to the contrary, a vendor shall not be entitled to deduct from the sum of the amounts of output tax and refunds contemplated in section 16(3), any amount of input tax—
(a) in respect of goods or services acquired by such vendor to the extent that such goods or services are acquired for
the purposes of entertainment: Provided that this paragraph shall not apply where—
...
(ix) that entertainment is acquired by the vendor for the purpose of awarding that entertainment as a prize
contemplated in section 16(3)(d) in consequence of a supply contemplated in section 8(13). (c) in respect of any motor car supplied to or imported by the vendor: Provided that –
(i) this paragraph shall not apply where such motor car is acquired by the vendor exclusively for the purpose of making a taxable supply of such motor car in the ordinary course of an enterprise which continuously or regularly supplies motor cars, whether such supply is made by way of sale or under an instalment credit agreement or by way of rental agreement at an economic rental consideration;
(ii) for the purposes of this paragraph a motor car acquired by such vendor for demonstration purposes or for temporary use prior to a taxable supply by such vendor shall be deemed to be acquired exclusively for the purpose of making a taxable supply;
(iii) this paragraph shall not apply where –
(aa) that motor car is acquired by the vendor for the purposes of awarding that motor car as a prize
contemplated in section 16(3)(d) in consequence of a supply contemplated in section 8(13);
Section 72 – Arrangements and decisions to overcome dif culties, anomalies or incongruities
If in any case the Commissioner is satis ed that in consequence of the manner in which any vendor or class of vendors conducts his or their business, trade or occupation, dif culties, anomalies or incongruities have arisen or may arise in regard to the application of any of the provisions of this Act, the Commissioner may make an arrangement or give a direction as to—
(a) the manner in which such provisions shall be applied; or
(b) the calculation or payment of tax or the application of any rate of zero per cent or any exemption from tax
provided in this Act,
in the case of such vendor or class of vendors or any person transacting with such vendor or class of vendors as appears to overcome such dif culties, anomalies or incongruities: Provided that such direction or arrangement shall not have the effect of substantially reducing or increasing the ultimate liability for tax levied under this Act
Income Tax Interpretation Note 42
The Supply of Goods and/or Services by the Travel and Tourism Industry
DATE: ACT: SECTION: SUBJECT:
1. Purpose
2. Background 3. The Law
2 April 2007
VALUE-ADDED TAX ACT 89 OF 1991, (THE VAT ACT)
SECTIONS 1, 7 AND 11
THE SUPPLY OF GOODS AND/OR SERVICES BY THE TRAVEL AND TOURISM INDUSTRY
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