SARS introduces new measures for money, stamps, alcohol and tobacco
CIGARETTES AND tobacco materials, which have been involved in some of the major export scams uncovered by customs officials in recent months, are not included in the zero rate of VAT on exports, according
to South African Revenue Services (SARS).
As a result of what it terms unacceptable levels of evasion involving the application of the zero rating, new measures have been introduced by SARS.
Where goods are sold to a customer and he exports the goods in terms of the Export Incentive Scheme, a definition of 'movable goods' has now been added.
This comprises corporeal, movable items, but excludes money, stamps, any alcoholic beverage and tobacco or
tobacco containing substances, including cigarettes, cigars, pipe tobacco and snuff. SARS points out that the zero rate may not be applied in the case of these goods, nor may any refund of VAT be made in respect of them.
In other aspects, where goods are consigned or delivered by the RSA vendor, the latter must obtain documentary proof of export. In this instance the goods must be physically delivered by the RSA vendor to the recipient at the address in the export country.
If, however, a cartage contractor is used, he must be contractually liable to the vendor to effect delivery of the goods, and the RSA vendor is liable for the full cost of such delivery.
In each case the goods must be covered by the zero-rated tax invoice, together with a copy of the export documentation bearing an original RSA customs stamp. In addition proof of payment and proof that the goods have been received by the recipient in the export country must be retained by the RSA vendor for inspection purposes.
Goods must also be exported within one month of the tax invoice. If the vendor has not obtained the required documentation as required within two months from the date of the tax invoice, output tax must then be calculated at the standard rate.
However, if documentation is obtained at a later stage, provided it is within one year of the date of transaction, an input tax credit may be claimed.
By Leonard Neill
