Page 436 - Juta's Indirect Tax

IN 56 (2) VaLue-added tax act: InterPretatIOn nOtes IN 56 (2)
(a) the Commissioner has granted prior approval for the issue of such do
cuments by a recipient or recipients of a speci ed class in relation to the supplies or supplies of a speci ed category
to which the documents relate; and
(b) the supplier and the recipient agree that the supplier shall not issue a credit note or, as the case may be, a debit
note in respect of any supply to which this subsection applies; and
(c) a copy of any such document is provided to the supplier and another copy is retained by the recipient:
Provided that—
(i) where a credit note is issued in accordance with this subsection, any credit note issued by the supplier in
respect of that supply shall be deemed not to be a credit note for the purposes of this Act;
(ii) where a debit note is issued in accordance with this subsection, any debit note issued by the supplier in
respect of that supply shall be deemed not to be a debit note for the purposes of this Act.
Section 55 – Records
(1) In addition to the records required under Part A of Chapter 4 of the Tax Administration Act, every vendor must, in particular, keep the following records and documents:
(a) a record of all goods and services supplied by or to the vendor showing the goods and services, the rate of tax
applicable to the supply and the suppliers or their agents, in suf cient detail to enable the goods and services, the rate of tax, the suppliers or the agents to be readily identi ed by the Commissioner, and all invoices, tax invoices, credit notes, debit notes, bank statements, deposit slips, stock lists and paid cheques relating thereto: Provided that a vendor’s records do not have to show the rate of tax where the vendor has been authorised by the Commissioner to calculate the tax payable by him in accordance with a method prescribed by regulation, as contemplated in section 16(1);
(aA) a record of all importations of goods and documents relating thereto as contemplated in section 16(2)(d);
(aB) any documentary proof required to be obtained and retained in accordance with section 16(2)(f);
(b) the charts and codes of account, the accounting instruction manuals and the system and programme documentation which describe the accounting system used in each tax period in the supply of goods and services;
(c) any list required to be prepared in accordance with section 15(9); and
(d) any documentary proof required to be obtained and retained in accordance with section 11(3).
Annexure B – Non-exhaustive list of examples of circumstances and supplies which would quality for recipient- created tax invoices, credit and debit notes
1. Quantity & Measuring
Example 1 – Commission agent
Facts:
Company A, a registered vendor for VAT purposes, does not employ any sales representatives and therefore uses independent VAT registered agents to assist with obtaining orders, merchandising and retailing. The agent obtains orders and places the orders with Company A via Company A’s call centre. Company A records the order on its system and a distributor packs and delivers the goods directly to the customer. The customer pays Company A directly. Company A pays the agent a commission, based on completed sales made for the month (that is, delivered to and fully paid for by the customer). Company A is in a position to determine the consideration payable to the agents.
Can Company A issue recipient-created tax invoices for the supplies acquired from the agents without obtaining prior approval from the Commissioner?
Result:
Company A quali es in terms of BGR 15 (refer to 5.2 of this Note) to issue recipient-created tax invoices without obtaining prior approval from the Commissioner, provided that the requirements of BGR 15 (refer to 5.4 of this Note) are satis ed.
Example 2 – Farmer
Facts:
Vendor B is a farmer who sells produce to Co-operative XYZ (both parties are registered vendors for VAT purposes). Vendor B is responsible for the delivery of its produce to Co-operative XYZ. Co-operative XYZ on receipt of the delivery weighs the produce and issues an in-house ticket to Vendor B. Co-operative XYZ pays Vendor B a xed price per ton of produce delivered.
Can Co-operative XYZ issue recipient-created tax invoices for the supplies acquired from Vendor B without obtaining prior approval from the Commissioner?
Result:
Co-operative XYZ quali es in terms of BGR 15 (refer to 5.2 of this Note) to issue recipient-created tax invoices without obtaining prior approval from the Commissioner, provided that the requirements of BGR 15 (refer to 5.4 of this Note) are satis ed.
428 Juta’s IndIrect tax 2016