Page 524 - Juta's Indirect Tax

BGR 017 VALUE-ADDED TAX ACT: BinDing gEnErAL rULingS BGR 018
The effect of the aforementioned provisions of section 50, is that any supplies made in the course or furtherance of the registration of the branch enterprise and the subsequent cancellation of such branch enterprise will not have any VAT implication, that is, the transfer of the activity to the main enterprise will not be subject to VAT.
After cancellation of the registration of the branch enterprise, the main enterprise must account for VAT and be responsible for all the activities of that branch enterprise.
In terms of section 50 (5), the main enterprise will remain responsible and be liable when any branch enterprise which is separately registered does not comply with the requirements of the VAT Act.
The cancellation of the registration of the branch enterprise discussed in this BGR does not apply to –
• any branch enterprise, of a main enterprise permanently situated outside the Republic, as contemplated in proviso (ii)
of the de nition of ‘enterprise’; or
• a cancellation of the registration of the branch enterprise as a result of the main enterprise’s registration being cancelled
[see section 50 (4)].
3. Ruling
The cancellation of the registration of the branch enterprise, as contemplated in section 50 (2), will as a result of section 50 (3) not constitute a deemed supply as contemplated in section 8 (2). On cancellation of the registration of the branch enterprise, the activities of the branch enterprise will be deemed to be carried on by the main enterprise.
4. Period for which this ruling is valid
This BGR is effective from 1 April 2013 and is valid for an inde nite period.
Any ruling issued to vendors stating anything to the contrary of this BGR is hereby withdrawn from the date of
publication of this BGR.
DATE: ACT: SECTION: SUBJECT:
Preamble
BINDING GENERAL RULING (VAT) NO: 18
27 March 2013
VALUE-ADDED TAX ACT 89 OF 1991 (the VAT Act)
SECTION 11 (1) (j) READ WITH ITEM 13 IN PART B OF SCHEDULE 2 TO THE VAT ACT THE ZERO-RATING OF VARIOUS TYPES OF DATES
For the purposes of this ruling –
• ‘BGR’ means a binding general ruling issued under section 89 of the Tax Administration Act 28 of 2011; • ‘Item 13’ means Item 13 in Part B of Schedule 2;
• ‘Schedule’ means a Schedule to the VAT Act; and
• any word or expression bears the meaning ascribed to it in the Vat Act.
1. Purpose
This BGR sets out the VAT treatment of dates in its various forms in order to determine if the supply of such dates will be subject to VAT at the zero rate as envisaged in section 11 (1) (j) read with Item 13.
2. Background
Suppliers and importers of dates have approached SARS requesting con rmation that the supply of dates in its various forms will be subject to VAT at the zero rate, and that the importation thereof would be exempt from VAT.
3. The law and its application
Any vendor making taxable supplies of goods or services in the course or furtherance of any enterprise is, in terms of section 7 (1) (a), required to levy VAT at the rate of 14% on these supplies. However, this levying of VAT is, amongst other exceptions, subject to the zero-rating provisions in terms of section 11 read with section 11 (3).
In this regard, section 11 (3) requires a vendor to obtain and retain documentary proof substantiating the vendor’s entitlement to apply the zero rate. Interpretation Note 31 ‘Documentary Proof Required for the Zero-Rating of Goods and Services’* sets out the documentary proof that is acceptable to the Commissioner for the purposes of section 11 (3). In terms of Interpretation Note 31 a copy of the supplier’s zero-rated tax invoice is acceptable to the Commissioner for the application of the zero rate contemplated in section 11 (1) (j).
3.1 Various forms of dates
3.1.1 Fresh unpitted dates
A fresh unpitted date is a date in its natural form with the pit intact and the appearance of the date has not been altered in any way. Fresh dates are available soft, semi-soft or dry. The dry varieties of fresh dates are not the same as the ‘dried’ dates (which have been deliberately dehydrated). ‘Dry’ dates are fresh dates that contain relatively little moisture as a result of a natural ripening process.
3.1.2 Dried dates
A dried date contains less moisture than a soft date. A dried date is deliberately dehydrated to remove its moisture. Dried dates have a longer shelf-life than fresh dates.
* This includes all updates of such Interpretation Note.
516 Juta’s IndIrect tax 2016