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Diesel rebate where a plant uses a diesel generator

15 January 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I have a client that conducts the mining, processing, screening and crushing of manganese. There is no Eskom power, therefore the plant is run by a diesel generator. I am not too certain if my client qualifies for a diesel rebate. Please advise me if a diesel rebate can be claimed from SARS.

A: From the facts provided to qualify for the diesel rebate in respect of mining activities, your client must comply with Note 6(f) of Part 3 of Schedule No. 6 to the Customs and Excise Act, Act No. 91 of 1964. At sub-note (uu) it lists the vehicles and equipment which are deemed to form an integral part of mining operations and diesel generators are not listed. Note (b)(v) deals with diesel electricity generation but is limited to plants producing more than 200mw for the national  distribution network.

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.


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