Page 472 - Juta's Indirect Tax

IN 70 VaLue-added tax act: InterPretatIOn nOtes IN 70
where the goods or services concerned are acquired by the vendor wholly for the purpose of consumption, use or supply in the course of making taxable supplies or, where the goods or services are acquired by the vendor partly for such purpose, to the extent (as determined in accordance with the provisions of section 17) that the goods or services concerned are acquired by the vendor for such purpose.
‘taxable supply’ means any supply of goods or services which is chargeable with tax under the provisions of section 7 (1) (a), including tax chargeable at the rate of zero per cent under section 11;
‘welfare organisation’ means any public bene t organisation contemplated in paragraph (a) of the de nition of “public bene t organisation” in section 30 (1) of the Income Tax Act that has been approved by the Commissioner in terms of section 30 (3) of that Act, if it carries on or intends to carry on any welfare activity determined by the Minister for purposes of this Act, relating to those activities that fall under the headings—
(a) welfare and humanitarian;
(b) health care;
(c) land and housing;
(d) education and development; or
(e) conservation, environment and animal welfare.
Section 10 – Value of supply of goods or services.
(1) For the purposes of this Act the following provisions of this section shall apply for determining the value of any supply of goods or services.
(2) The value to be placed on any supply of goods or services shall, save as is otherwise provided in this section, be the amount of the consideration for such supply, as determined in accordance with the provisions of subsection (3), less so much of such amount as represents tax: Provided that—
(i) there shall be excluded from such consideration the value of any postage stamp as de ned in section 1 of the Post Of ce Act, 1958 (Act No. 44 of 1958), when used in the payment of consideration for any service supplied by the postal company as de ned in section 1 of the Post Of ce Act, 1958;
(ii) where the portion of the amount of the said consideration which represents tax is not accounted for separately by the vendor, the said portion shall be deemed to be an amount equal to the tax fraction of that consideration.
(3) For the purposes of this Act the amount of any consideration referred to in this section shall be—
(a) to the extent that such consideration is a consideration in money, the amount of the money; and
(b) to the extent that such consideration is not a consideration in money, the open market value of that consideration.
...
(21) Where any supply of entertainment is made by a vendor and in terms of section 17 no deduction of input tax was made in terms of section 16 (3) in respect of the acquisition by the vendor of goods or services for the purpose of such entertainment, the value of such supply shall be deemed to be nil.
(22) Where a taxable supply is not the only matter to which a consideration relates, the supply shall be deemed to be for such part of the consideration as is properly attributable to it.
(23) Save as otherwise provided in this section, where any supply is made for no consideration the value of that supply shall be deemed to be nil.
Section 16 – Calculation of VAT
Section 18 (1) – Adjustments
(3) Subject to the provisions of subsection (2) of this section and the provisions of sections 15 and 17, the amount of tax payable in respect of a tax period shall be calculated by deducting from the sum of the amounts of output tax of the vendor which are attributable to that period, as determined under subsection (4), and the amounts (if any) received by the vendor during that period by way of refunds of tax charged under section 7 (1) (b) and (c) and 7 (3) (a), the following amounts, namely—
(a) ...
(b) ...
(1) Subject to the provisions of section 8 (2), where—
(a) goods or services have been supplied to or imported by a vendor; or
(b) goods have been manufactured, assembled, constructed or produced by him; or
(c) goods or services were deemed by subsection (4) to have been supplied to him,
(excluding goods or services to the extent that, in respect of the acquisition of which by the vendor a deduction of input tax was denied by section 17(2) or would have been denied if that section had been applicable prior to the commencement date) and such goods or services were acquired, manufactured, assembled, constructed or produced by such vendor wholly or partly for the purpose of consumption, use or supply in the course of making taxable supplies or such goods were held or applied for that purpose, such goods or services shall—
(i) if they are subsequently applied by him (otherwise than in the circumstances contemplated in section 8 (9)) wholly for a purpose other than the said purpose; or
(ii) if they are subsequently applied by him wholly for a purpose in respect of which, if such goods or services had been acquired by him at the time of such application, a deduction of input tax would have been denied in terms of section 17 (2) (a) or (c),
be deemed to have been supplied by him by way of a taxable supply by him in the course of his enterprise.
464 Juta’s IndIrect tax 2016