Page 427 - Juta's Indirect Tax

IN 49 (2) VaLue-added tax act: InterPretatIOn nOtes IN 49 (2)
(ii) this subsection does not apply where—
(aa) such goods or services were acquired before 1 April 2005, or an input tax deduction in respect of that
acquisition was denied under proviso (iv) to section 18(4); and
(bb) the vendor is a public authority which registered prior to 1 April 2005, notwithstanding paragraph (b)
(i) of ‘enterprise’ in section 1 or a public entity listed in Part A or C of Schedule 3 to the Public Finance
Management Act, 1999 (Act No. 1 of 1999);
(iii) this subsection does not apply where such goods or services were acquired by a municipality before 1 July
2006, or an input tax deduction in respect of that acquisition was denied in terms of paragraph (v) of the
proviso to section 18(4);
(i) an amount equal to the tax fraction of any payment made by the vendor during the tax period in respect of the
redemption with him, or his agent, of the monetary value of any token, voucher or stamp contemplated in section 10(20), to a supplier of goods or services who has granted a discount on the surrender to him of such token, voucher or stamp by a recipient of a supply of goods or services;
(j) (i)
in the case of a vendor who has, during the tax period, supplied a property in possession in the course or furtherance of his enterprise under a sale, an amount equal to the tax fraction of the lesser of—
(aa) the amount (excluding any amount of tax) received in respect of the sale of such property in possession
less any amount paid by the vendor in respect of the acquisition of such property in possession; and (bb) the amount of the unrecovered loan balance less any amount paid by the vendor in respect of the
acquisition of such property in possession:
Provided that no deduction shall be made in terms of this paragraph where the person in default is or will be
held liable for payment of such lesser amount; (ii) for the purposes of this paragraph—
(aa) ‘property in possession’ means xed property acquired by any vendor—
(A) at a sale in execution as a result of default by any person (other than a person who held or applied
such xed property for the purpose of making taxable supplies in the course or furtherance of his enterprise immediately before such sale in execution) in respect of an unrecovered loan balance due to that vendor in terms of a credit agreement; or
(B) as a result of an abandonment authorised by the Master of the High Court where such person has defaulted in respect of an unrecovered loan balance due to that vendor in terms of a credit agreement or gone insolvent;
(bb) ‘unrecovered loan balance’ means the amount of capital, interest and administrative holding costs outstanding in terms of a credit agreement at the date of sale in execution or the date of authorisation of abandonment by the Master of the High Court;
(k) an amount of input tax as determined by the Commissioner paid by a vendor to a supplier of pastoral, agricultural or other farming products who is not a vendor, in terms of a scheme operated by the controlling body of an industry for the development of small-scale farmers approved by the Minister with the concurrence of the Minister of Agriculture and Land Affairs to compensate that supplier for tax incurred in the production of such goods;
(l) an amount as determined by the Commissioner in lieu of a refund in respect of the purchase and use of diesel paid by a vendor to a supplier of pastoral, agricultural or other farming products who is not a vendor, in terms of a scheme operated by the controlling body of an industry for the development of small-scale farmers approved by the Minister with the concurrence of the Minister of Agriculture and Land Affairs to compensate that supplier for an amount refundable in the production of such goods;
(m) an amount equal to the tax fraction initially applied to any excess amount contemplated in section 8(27) which is refunded by the vendor during the tax period
(n) in the case of a vendor deemed to supply goods in terms of section 8(24), where those goods are subsequently returned to the customs controlled area, and amount equal to the tax fraction of the lesser of the value determined in terms of section 10(25) or the open market value of those goods on the date on which those goods are returned to the customs controlled area.
Provided that—
(i) where any vendor is entitled under the preceding provisions of this subsection to deduct any amount in respect of
any tax period from the said sum, the vendor may deduct that amount from the amount of output tax attributable to a later tax period which ends no later than ve years after the end of the tax period during which—
(aa) the tax invoice for that supply should have been issued as contemplated in section 20(1);
(bb) goods were entered for home consumption in terms of the Customs and Excise Act;
(cc) second-hand goods were acquired or goods as contemplated in section 8(10) were repossessed;
(dd) the agent should have noti ed the principal as contemplated in section 54 (3); or
(ee) in any other case, the vendor for the rst time became entitled to such deduction, notwithstanding the
documentary proof that the vendor must be in possession of in terms of subsection (2) of this section, and
(ii) the said period of ve years contemplated in proviso (i) of this section shall be limited to six months prior to the tax period in which the deduction is made, where the Commissioner is satis ed that the deduction was not
permissible in accordance with the practice generally prevailing,
and to the extent that it has not previously been deducted by the vendor under this subsection: Provided further that the amount of input tax which, in relation to any supply of goods or services to a vendor, the vendor may deduct in respect of any payment referred to in paragraph (a)(ii) or (b)(i) of this subsection, shall be an amount which bears to the full amount of the input tax relating to that supply the same ratio as the amount of the payment bears to the full value on which tax was payable in respect of the supply.
Juta’s IndIrect tax 2016 419