Mukuru Africa (Pty) Ltd v Commissioner for the South African Revenue Service (520/2020) [2021] ZASCA 116; 84 SATC 304 (16 September 2021)

Mukuru Africa (Pty) Ltd v Commissioner for the South African Revenue Service (520/2020) [2021] ZASCA 116; 84 SATC 304 (16 September 2021)

The Supreme Court of Appeal held that the standard turnover-based method (STB) under BGR16 was the only approved apportionment method applicable to Mukuru until SARS issued a private binding ruling permitting the use of the transaction count (TC) method. Proviso (iii) to section 17(1) of the VAT Act expressly precluded SARS from granting retrospective approval for the TC method for any period prior to the tax year in which the application was made. Mukuru was not entitled to disregard BGR16 or apply its own apportionment method unilaterally. The application for the July 2018 ruling was a request to change from the STB method to the TC method, and SARS had no power to approve the change...

Citation
[2021] ZASCA 116
Parties
Appellant: Mukuru Africa (Pty) Ltd; Respondent: Commissioner for the South African Revenue Service
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
16 September 2021
Case Number
520/2020
Procedural Posture
Civil Appeal / Appeal From Tax Court of South Africa, Western Cape
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Ponnan, Mbha, Mathopo, Makgoka, Hughes
Legal Topics
Value Added Tax, Apportionment of Input Tax, Vat Rulings, Binding General Ruling, Retrospective Application
Tax Law Administrative Law Value Added Tax Apportionment of Input Tax Vat Rulings Binding General Ruling Retrospective Application

Case Brief

Summary, issues, holding and outcome

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Parties

Mukuru Africa (Pty) Ltd

Appellant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Civil Appeal / Appeal From Tax Court of South Africa, Western Cape

Legal Issues

  1. 1 Whether SARS was precluded by proviso (iii) to section 17(1) of the VAT Act from granting retrospective approval for the use of the transaction count (TC) ratio for apportionment of input VAT.
  2. 2 Whether the standard turnover-based (STB) method under Binding General Ruling 16 was the only applicable apportionment method until SARS issued a private binding ruling to Mukuru.
  3. 3 Whether Mukuru could unilaterally disregard BGR16 and apply its own apportionment method prior to SARS approval.

Ratio Decidendi

The Supreme Court of Appeal held that the standard turnover-based method (STB) under BGR16 was the only approved apportionment method applicable to Mukuru until SARS issued a private binding ruling permitting the use of the transaction count (TC) method. Proviso (iii) to section 17(1) of the VAT Act expressly precluded SARS from granting retrospective approval for the TC method for any period prior to the tax year in which the application was made. Mukuru was not entitled to disregard BGR16 or apply its own apportionment method unilaterally. The application for the July 2018 ruling was a request to change from the STB method to the TC method, and SARS had no power to approve the change...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including those consequent upon the employment of two counsel.