Rennies Travel (Pty) Ltd v SARS (207/2021) [2022] ZASCA 83; 2022 (6) SA 349 (SCA); 85 SATC 163 (6 June 2022)

Rennies Travel (Pty) Ltd v SARS (207/2021) [2022] ZASCA 83; 2022 (6) SA 349 (SCA); 85 SATC 163 (6 June 2022)

The Supreme Court of Appeal held that the supplementary commission received by the appellant was consideration for the same supply of services as the standard commission, namely the arranging of transport for international passengers through the sale of airline tickets. The fact that the supplementary commission was paid upon reaching sales targets did not alter the nature of the services supplied. Therefore, the supplementary commission must be zero-rated under s 11(2)(a) and (d) of the VAT Act. The court further held that the notice of appeal was lodged timeously in terms of the Tax Administration Act, which prevails over the SCA rules as national legislation takes precedence over...

Citation
[2022] ZASCA 83
Parties
Appellant: Rennies Travel (Pty) Ltd; Respondent: The Commissioner for the South African Revenue Services
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
6 June 2022
Case Number
207/2021
Procedural Posture
Civil Appeal / Appeal From the Tax Court of South Africa, Johannesburg
Outcome
Appeal upheld; order of the tax court set aside and replaced.
Judges
Van der Merwe, Plasket, Hughes, Tsoka, Musi
Legal Topics
Value Added Tax, Zero Rating, Tax Assessment, Tax Administration Act, Appeal Lodgement Period
Tax Law Civil Procedure Value Added Tax Zero Rating Tax Assessment Tax Administration Act Appeal Lodgement Period

Case Brief

Summary, issues, holding and outcome

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Parties

Rennies Travel (Pty) Ltd

Appellant

The Commissioner for the South African Revenue Services

Respondent

Procedural Posture

Civil Appeal / Appeal From the Tax Court of South Africa, Johannesburg

Legal Issues

  1. 1 Whether supplementary commission received by the appellant for achieving agreed sales targets of international airline tickets constitutes consideration for arranging transport of international passengers and should be zero-rated under s 11(2)(a) and (d) of the VAT Act.
  2. 2 Whether the notice of appeal was lodged timeously in terms of the Tax Administration Act or the Supreme Court of Appeal rules.

Ratio Decidendi

The Supreme Court of Appeal held that the supplementary commission received by the appellant was consideration for the same supply of services as the standard commission, namely the arranging of transport for international passengers through the sale of airline tickets. The fact that the supplementary commission was paid upon reaching sales targets did not alter the nature of the services supplied. Therefore, the supplementary commission must be zero-rated under s 11(2)(a) and (d) of the VAT Act. The court further held that the notice of appeal was lodged timeously in terms of the Tax Administration Act, which prevails over the SCA rules as national legislation takes precedence over...

Court Disposition

Appeal upheld; order of the tax court set aside and replaced.

Orders

  • The appeal is upheld with costs.
  • The order of the tax court is set aside and replaced with: 'The additional VAT assessments in respect of the appellant’s February 2012 to December 2016 VAT periods, to the extent that they impose VAT at the standard rate on supplementary commission paid to the appellant, are set aside.'