Is the supply of animal medicine by a vet to a farmer zero-rated?
19 May 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: Our client is
a veterinarian and supplies farmers with animal medicine. He would like to
purchase these supplies without being charged VAT (the supply to him is zero
rated) and then on-sell these supplies at a zero rate of VAT. In order for him
to buy these supplies at a zero rate, he need his VAT 103 amended. Who do we
approach at SARS, as we have been back and forth with no definite answers?
A: We don’t
believe that the veterinarian qualifies for the rate of zero per cent.
The provisions of paragraph 1 (of Part A of Schedule 2 to
the Value-added Tax Act) applies only if SARS, in respect of a vendor
registered under this Act, is satisfied that that vendor, being the recipient
of any such goods, carries on agricultural, pastoral or other farming
operations and has issued to him a notice of registration in which
authorization is granted whereby the goods concerned may be supplied to him at
the rate of zero per cent. The
veterinarian would not be carrying on farming operations and cannot receive the
goods at the rate of zero per cent.
It is the farmers that will qualify and the veterinarian
would not need to request SARS to change his VAT103.
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.