Sars and industry reach consensus over VAT issue

Bills of entry issued by destination country no longer required Alan Peat THE CONTENTIOUS issue of last year’s SA Revenue Service (Sars) “interpretation note number 30” on exports which are zero-rated for value added tax (VAT) has been put to rest – and a revised note 30 issued which has been accepted by the forwarding community. The big question that was bandied around in the forwarding industry the instant the draft of the first note was published last March was: How, as the note demanded, is it possible to get import bills of entry from destination countries – especially those in the African continent – so that you get your zero-rating? But it has been sorted out, according to Charles Speed-Andrews, product development director of Safcor Panalpina, who handles the “Saaff co-operation with Sars” portfolio for the agents’ body. He described the revised requirements as “reasonable and should work”. “Most of the work now falls within value-added tax (VAT) audit guidelines,” he added, “and not the Customs & Excise Act - which also makes sense. Said Speed-Andrews: “As with anything, specific problems on the rules or the way they are applied will arise. But the process has left all parties able to take these issues up when they arise. “It thus shows the strength of constructive engagement on the issue.” The end result has been the new interpretation note 30 just published by Sars. According to the informa­tion summary supplied to FTW, the provisions now require that physical export take place within two months of the invoice date. If goods are supplied on a pre-paid basis the export must occur within two months of the date of payment. The vendor must be in possession of proof of payment for the goods within three months of the date of invoice - failing which the VAT must be brought to account. This tax may be claimed back by way of an input tax adjustment once proof of payment is received, provided this occurs within one year of the date of invoice. Exporters who require an extension to the three-month period must make written application to Sars for this. Interpretation note 30 stipulates that Sars will not issue blanket rulings to vendors for extensions. Exporters should also note that Sars reserves the right to determine whether the proof of export held by an exporter is adequate for the purpose. Exporters must retain either an export bill of entry bearing an original Sars stamp or a copy of Sars’ computer-generated release notification where the export declaration has been made by electronic data interchange (EDI). As a relief to the forwarding and trading communities, the bills of entry issued by the destination country are no longer required. Exporters who make cross-border deliveries using their own transport must obtain either a delivery note signed by the recipient or a copy of the recipient’s goods received voucher. Exporters who were unable to comply with requirements called for in issue one of interpretation note 30 should note that those requirements that have been deleted from the revised version will not be enforced.