Mobile Telephone Networks (Pty) Limited v Commissioner for the South African Revenue Service (79960/2019) [2021] ZAGPPHC 1; 83 SATC 270 (12 January 2021)

Mobile Telephone Networks (Pty) Limited v Commissioner for the South African Revenue Service (79960/2019) [2021] ZAGPPHC 1; 83 SATC 270 (12 January 2021)

The court held that the applicant's multi-purpose airtime vouchers are not akin to gift vouchers but are specific to the supply of 'airtime', which constitutes specified goods or services. The supply of such vouchers attracts revenue for the applicant at the point of sale, and VAT must be accounted for in the period in which the voucher is sold, as per section 9(1) and section 7(1)(a) of the VAT Act. The respondent's interpretation, consistently applied over time, is correct: the vouchers fall within section 10(19), not section 10(18). The declaratory relief sought is competent, but the applicant failed to establish that its vouchers should be treated under section 10(18). The application...

Citation
[2021] ZAGPPHC 1
Parties
Applicant: Mobile Telephone Networks (Pty) Limited; Respondent: Commissioner for the South African Revenue Service
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
12 January 2021
Case Number
79960/2019
Procedural Posture
Review Application / Judgment
Outcome
Application dismissed with costs, including costs of two counsel where so employed.
Judges
W Hughes
Legal Topics
Value Added Tax, Multi Purpose Vouchers, Statutory Interpretation, Declaratory Relief
Tax Law Commercial and Corporate Value Added Tax Multi Purpose Vouchers Statutory Interpretation Declaratory Relief

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 9 Party arguments 2
Sign in to unlock

Parties

Mobile Telephone Networks (Pty) Limited

Applicant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Review Application / Judgment

Legal Issues

  1. 1 Whether the supply of pre-paid multi-purpose vouchers by the applicant should be treated under section 10(18) or section 10(19) of the VAT Act for VAT purposes.
  2. 2 Whether the declaratory relief sought by the applicant is competent in the context of the VAT Act.
  3. 3 Whether the respondent's ruling on the VAT treatment of airtime vouchers should be set aside.

Ratio Decidendi

The court held that the applicant's multi-purpose airtime vouchers are not akin to gift vouchers but are specific to the supply of 'airtime', which constitutes specified goods or services. The supply of such vouchers attracts revenue for the applicant at the point of sale, and VAT must be accounted for in the period in which the voucher is sold, as per section 9(1) and section 7(1)(a) of the VAT Act. The respondent's interpretation, consistently applied over time, is correct: the vouchers fall within section 10(19), not section 10(18). The declaratory relief sought is competent, but the applicant failed to establish that its vouchers should be treated under section 10(18). The application...

Court Disposition

Application dismissed with costs, including costs of two counsel where so employed.

Orders

  • The application for a declaratory order as set out in the notice of motion of the applicant is dismissed with costs.
  • Such costs are to include the employment of two counsel, where so employed.