ABC (Pty) Ltd v Commissioner For The South African Revenue Service (VAT 1558) [2018] ZATC 7 (5 December 2018)

ABC (Pty) Ltd v Commissioner For The South African Revenue Service (VAT 1558) [2018] ZATC 7 (5 December 2018)

The court found that section 8(15) of the Value-Added Tax Act applies where a single supply consists of both goods and services, and if separate considerations could notionally have been payable, each part is deemed a separate supply for VAT purposes. The appellant supplied an advertising and promotion service to foreign brand owners, which included the local distribution of promotional goods. The evidence showed that the cost of promotional goods could be separated from the total fee charged to the brand owners. The court held that the supply of promotional goods was a cognisable supply capable of notional separation and, as such, was subject to VAT at the standard rate under section...

Citation
[2018] ZATC 7
Parties
Appellant: ABC (Pty) Ltd; Respondent: Commissioner For The South African Revenue Service
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
5 December 2018
Case Number
VAT 1558
Procedural Posture
Tax Appeal / Final Judgment
Outcome
Appeal dismissed; additional VAT assessments for the 2009, 2010, and 2011 periods confirmed.
Judges
K M Savage
Legal Topics
Value Added Tax, Zero Rating, Composite Supply, Deeming Provision, Supply of Goods, Supply of Services
Tax Law Value Added Tax Zero Rating Composite Supply Deeming Provision Supply of Goods Supply of Services

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 5 Authorities cited 16 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

ABC (Pty) Ltd

Appellant

Commissioner For The South African Revenue Service

Respondent

Procedural Posture

Tax Appeal / Final Judgment

Legal Issues

  1. 1 Whether section 8(15) of the Value-Added Tax Act permits the notional separation of a single supply into separate supplies for VAT purposes.
  2. 2 Whether the supply of promotional goods as part of an advertising and promotion service to foreign brand owners is subject to standard-rated VAT or qualifies for zero-rating under section 11(2)(l).
  3. 3 Whether the appellant's supply to foreign brand owners constitutes a supply of services or also a supply of goods for VAT purposes.

Ratio Decidendi

The court found that section 8(15) of the Value-Added Tax Act applies where a single supply consists of both goods and services, and if separate considerations could notionally have been payable, each part is deemed a separate supply for VAT purposes. The appellant supplied an advertising and promotion service to foreign brand owners, which included the local distribution of promotional goods. The evidence showed that the cost of promotional goods could be separated from the total fee charged to the brand owners. The court held that the supply of promotional goods was a cognisable supply capable of notional separation and, as such, was subject to VAT at the standard rate under section...

Court Disposition

Appeal dismissed; additional VAT assessments for the 2009, 2010, and 2011 periods confirmed.

Orders

  • The appeal is dismissed and the additional assessments for the VAT periods 2009, 2010 and 2011 raised against the taxpayer by the Commissioner are confirmed.