Page 435 - Juta's Indirect Tax

IN 56 (2) VaLue-added tax act: InterPretatIOn nOtes IN 56 (2)
(e) an error has occurred in stipulating the amount of consideration agreed upon for that supply. and the supplier has—
(i) provided a tax invoice in relation to that supply and the amount shown therein as tax charged on that supply is incorrect in relation to the amount properly chargeable on that supply as a result of the occurrence of any one or more of the above-mentioned events; or
(ii) furnished a return in relation to the tax period in respect of which output tax on that supply is attributable, and has accounted for an incorrect amount of output tax on that supply in relation to the amount properly chargeable on that supply as a result of the occurrence of any one or more of the above-mentioned events.
(2) Where a supplier has accounted for an incorrect amount of output tax as contemplated in subsection (1), that supplier shall make an adjustment in calculating the tax payable by the supplier in the return for the tax period during which it has become apparent that the output tax is incorrect, and if—
(a) the output tax properly chargeable in relation to that supply exceeds the output tax actually accounted for by the
supplier, the amount of that excess shall be deemed to be tax charged by that supplier in relation to a taxable supply attributable to the tax period in which the adjustment is to be made, and shall not be attributable to any prior tax period; or
(b) the output tax actually accounted for exceeds the output tax properly chargeable in relation to that supply, that supplier shall either make a deduction in terms of section 16(3) in respect of the amount of that excess (such amount being deemed for the purposes of that section to be input tax), or reduce the amount of output tax attributable to the said tax period in terms of section 16(4) by the amount of that excess: Provided that the said deduction shall not be made where the excess tax has been borne by a recipient of goods or services supplied by the supplier and the recipient is not a vendor, unless the amount of the excess tax has been repaid by the supplier to the recipient, whether in cash or by way of a credit against any amount owing to the supplier by the recipient.
(3) Subject to this section, where a tax invoice has been provided as contemplated in subsection (1)(i), and—
(a) the amount shown as tax charged in that tax invoice exceeds the actual tax charged in respect of the supply
concerned, the supplier shall provide the recipient with a credit note, containing the following particulars: (i) The words ‘credit note’ in a prominent place;
(ii) the name, address and VAT registration number of the vendor;
(iii) the name, address and, where the recipient is a registered vendor, the VAT registration number of the
recipient, except where the credit note relates to a supply in respect of which a tax invoice contemplated in
section 20(5) was issued;
(iv) the date on which the credit note was issued;
(v) either—
(aa) the amount by which the value of the said supply shown on the tax invoice has been reduced and the
amount of the excess tax; or
(bb) where the tax charged in respect of the supply is calculated by applying the tax fraction to the
consideration, the amount by which the consideration has been reduced and either the amount of the
excess tax or a statement that the reduction includes an amount of tax and the rate of the tax included; (vi) a brief explanation of the circumstances giving rise to the issuing of the credit note;
(vii) information suf cient to identify the transaction to which the credit note refers;
(b) the actual tax charged in respect of the supply concerned exceeds the tax shown in the tax invoice as charged, the supplier shall provide the recipient with a debit note, containing the following particulars:
(i) The words ‘debit note’ in a prominent place;
(ii) the name, address and VAT registration number of the vendor;
(iii) the name, address and, where the recipient is a registered vendor, the VAT registration number of the recipient, except where the debit note relates to a supply of goods in respect of which a tax invoice contemplated in section 20(5) was issued;
(iv) the date on which the debit note was issued; (v) either—
(aa) the amount by which the value of the said supply shown on the tax invoice has been increased and the amount of the additional tax; or
(bb) where the tax charged in respect of the supply is calculated by applying the tax fraction to the consideration, the amount by which the consideration has been increased and either the amount of the additional tax or a statement that the increase includes an amount of tax and the rate of the tax included;
(vi) a brief explanation of the circumstances giving rise to the issuing of the debit note;
(vii) information suf cient to identify the transaction to which the debit note refers: Provided that—
(A) it shall not be lawful to issue more than one credit note or debit note for the amount of the excess;
(B) if any registered vendor claims to have lost the original credit note or debit note, the supplier or recipient, as the
case may be, may provide a copy clearly marked ‘copy’;
(C) a supplier shall not be required to provide a recipient with a credit note contemplated in paragraph (a) of this
subsection in any case where and to the extent that the amount of the excess referred to in that paragraph arises as a result of the recipient taking up a prompt payment discount offered by the supplier, if the terms of the prompt payment discount offer are clearly stated on the face of the tax invoice.
(4) Where a recipient, being a registered vendor, creates a document containing the particulars speci ed in this section and purporting to be a credit note or a debit note in respect of a supply of goods or services made to the recipient by a supplier, being a registered vendor, the document shall be deemed to be a credit note or, as the case may be, a debit note provided by the supplier under subsection (3) where—
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