Page 420 - Juta's Indirect Tax

IN 49 (2) VALUE-ADDED TAX ACT: INTERPRETATION NOTES IN 49 (2)
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Deductions in respect of the purchase and use of diesel [s 16(3)(l)]
(a) Copy of SARS’ letter approving the methodology for determining the rate to be applied to the eligible diesel purchased and used, together with the supporting calculation wherein the approved methodology was used to determine the amount to be deducted.
(b) The annual report by an independent auditor subsequent to the review of the supporting calculation by such auditor.
(c) Goods received note substantiating the eligible diesel
purchased and used.
(d) Proof of payment of the VAT to the small-scale farmer,
for example, receipt, bank statement or internet payment con rmation.
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Deductions allowed in respect of excess consideration refunded
[s 16(3)(m)]
(a) Proof that the output tax has been accounted for on the excess amount received as contemplated in section 8(27).
(b) Proof that the excess amount has been refunded to the
customer, for example, receipt, bank statement, deposit slip or internet payment con rmation or proof that the overpayment is offset against the customer’s outstanding liability.
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Deductions allowed in respect of goods returned to a customs controlled area [s 16(3)(n)]
(a) VAT 267 form.
(b) Proof that the amount was included in output tax
previously declared or accounted for.
6. Conclusion
Input tax or any deduction under section 16(3) should be deducted in the VAT return in the period during which the time of supply occurs, or for imported goods, the period during which the VAT on importation is paid. The vendor must be in possession of the relevant documentary proof in terms of section 16(2) in order to qualify for the deduction.
Input tax or a deduction may be deducted in a later period if the vendor is unable to deduct input tax or a deduction in the aforementioned period (for example: because evidence is not received in time). In terms of the rst proviso to section 16(3), this later period may not be more than ve (5) years after the tax period when the input tax or special deduction should have been made. If the Commissioner is satis ed that the deduction was not permissible in accordance with the practice generally prevailing, the ve (5) year period is limited to six (6) months.
1 Input tax deduction is limited to any payment made.
2 Prior to 10 January 2012, input tax was limited to the transfer duty paid. With effect from 10 January 2012, input tax
is no longer limited to the amount of transfer duty paid. In order to qualify for the deduction, the transfer of the xed property must have been effected by registration in a deeds registry and the xed property must have been registered in the name of the vendor.
3 Prior to 1 April 2009, input tax was limited to the stamp duty paid. For the period 1 April 2009 to 10 January 2012, input tax was limited to the amount of transfer duty paid. With effect from 10 January 2012, input tax is no longer limited to the amount of transfer duty paid. In order to qualify for the deduction, a signed use agreement must have been entered into between the company that operates the share block scheme and a member of that company.
4 Input tax deduction is limited to VAT paid on importation.
5 For purposes of this Note, the term ‘tax invoice’ includes a document issued by the supplier in compliance with
section 20(7) and the term ‘debit note’ or ‘credit note’ includes a document issued by the supplier in compliance with section 21(5).
Annexure – The law
Section 1(1) – De nition of the term ‘input tax’
On or after 10 January 2012 (changes italicised and underlined)
‘input tax’, in relation to a vendor, means—
(a) tax charged under section 7 and payable in terms of 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);
(b) an amount equal to the tax fraction (being the tax fraction applicable at the time the supply is deemed to have
taken place) of the lesser of any consideration in money given by the vendor for or the open market value of the supply (not being a taxable supply) to him by way of a sale on or after the commencement date by a resident of the Republic (other than a person or diplomatic or consular mission of a foreign country established in the Republic that was granted relief, by way of a refund of tax as contemplated in section 68) of any second-hand goods situated in the Republic; and
(c) an amount equal to the tax fraction of the consideration in money deemed by section 10(16) to be for the supply (not being a taxable supply) by a debtor to the vendor of goods repossessed under an instalment credit agreement: Provided that the tax fraction applicable under this paragraph shall be the tax fraction applicable at the time of supply of the goods to the debtor under such agreement as contemplated in section 9(3)(c),
412 Juta’s IndIrect tax 2016