ABC (Pty) Ltd v The Commissioner for the South African Revenue Service (VAT 1857) [2020] ZATC 24; 83 SATC 396 (25 February 2020)

ABC (Pty) Ltd v The Commissioner for the South African Revenue Service (VAT 1857) [2020] ZATC 24; 83 SATC 396 (25 February 2020)

The court held that the definition of 'consideration' in section 1 of the VAT Act is broad and unambiguous, including any payment made in respect of the supply of goods, which encompasses transfer duty paid on the acquisition of immovable property from non-vendors. The court found that the inclusion of transfer duty in the calculation of notional input tax is consistent with the language, context, and purpose of the VAT Act, and does not result in the recovery of transfer duty but rather ensures that VAT is not paid twice on the same value-added. The respondent's unilateral practice was deemed irrelevant to statutory interpretation. The court concluded that the appellant is entitled to...

Citation
[2020] ZATC 24
Parties
Appellant: ABC (Pty) Ltd; Respondent: The Commissioner for the South African Revenue Service
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
25 February 2020
Case Number
VAT 1857
Procedural Posture
Tax Appeal / Appeal Against VAT Assessment
Outcome
Appeal upheld.
Judges
Sievers
Legal Topics
Value Added Tax, Notional Input Tax, Transfer Duty, Statutory Interpretation
Tax Law Value Added Tax Notional Input Tax Transfer Duty Statutory Interpretation

Case Brief

Summary, issues, holding and outcome

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Parties

ABC (Pty) Ltd

Appellant

The Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Tax Appeal / Appeal Against VAT Assessment

Legal Issues

  1. 1 Whether transfer duty paid on the purchase of immovable property from non-vendors may be included in the calculation of notional input tax for VAT purposes.
  2. 2 Whether the definition of 'consideration' in section 1 of the VAT Act encompasses transfer duty payments.
  3. 3 Whether SARS's unilateral practice regarding calculation of notional input tax is relevant to statutory interpretation.

Ratio Decidendi

The court held that the definition of 'consideration' in section 1 of the VAT Act is broad and unambiguous, including any payment made in respect of the supply of goods, which encompasses transfer duty paid on the acquisition of immovable property from non-vendors. The court found that the inclusion of transfer duty in the calculation of notional input tax is consistent with the language, context, and purpose of the VAT Act, and does not result in the recovery of transfer duty but rather ensures that VAT is not paid twice on the same value-added. The respondent's unilateral practice was deemed irrelevant to statutory interpretation. The court concluded that the appellant is entitled to...

Court Disposition

Appeal upheld.

Orders

  • The appeal is upheld.
  • The respondent is directed to alter the Notices of Assessment in accordance with the court's findings.