ABC (Pty) Ltd v Commissioner for the South African Revenue Service (872) [2013] ZATC 4 (2 December 2013)

ABC (Pty) Ltd v Commissioner for the South African Revenue Service (872) [2013] ZATC 4 (2 December 2013)

The appellant failed to comply with the requirements of the VAT Act for claiming input tax deductions. Specifically, the sponsors did not charge VAT or issue tax invoices for the supplies made to the appellant, and the appellant did not pay VAT on those sponsorships. The VAT Act requires that input tax can only be deducted if VAT has actually been charged and paid or is payable, and if the vendor holds a valid tax invoice at the time of submitting the return. The appellant did not possess valid tax invoices during the relevant VAT periods and did not pursue available remedies such as creating recipient-issued invoices with the Commissioner’s approval. The court found that the appellant...

Citation
[2013] ZATC 4
Parties
Appellant: ABC (Pty) Ltd; Respondent: Commissioner for the South African Revenue Service
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
2 December 2013
Case Number
872
Procedural Posture
Tax Appeal / Final Judgment
Outcome
Appeal dismissed; assessments confirmed; costs awarded to respondent.
Judges
N J Yekiso
Legal Topics
Value Added Tax, Input Tax Deduction, Tax Invoices, Barter Transactions
Tax Law Value Added Tax Input Tax Deduction Tax Invoices Barter Transactions

Case Brief

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Parties

ABC (Pty) Ltd

Appellant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Tax Appeal / Final Judgment

Legal Issues

  1. 1 Whether the appellant is entitled to deduct input tax in respect of supplies made by sponsors during the relevant VAT periods despite not being issued tax invoices.
  2. 2 Whether the amounts sought to be deducted by the appellant qualify for input tax deduction under the VAT Act.
  3. 3 Whether the respondent is obliged to compel sponsors to issue tax invoices to the appellant.

Ratio Decidendi

The appellant failed to comply with the requirements of the VAT Act for claiming input tax deductions. Specifically, the sponsors did not charge VAT or issue tax invoices for the supplies made to the appellant, and the appellant did not pay VAT on those sponsorships. The VAT Act requires that input tax can only be deducted if VAT has actually been charged and paid or is payable, and if the vendor holds a valid tax invoice at the time of submitting the return. The appellant did not possess valid tax invoices during the relevant VAT periods and did not pursue available remedies such as creating recipient-issued invoices with the Commissioner’s approval. The court found that the appellant...

Court Disposition

Appeal dismissed; assessments confirmed; costs awarded to respondent.

Orders

  • The appeal is dismissed.
  • The assessments as raised by the respondent are confirmed.