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VAT: No need for SARS to raise an assessment (Fastmould CC case)

18 November 2011   (0 Comments)
Posted by: SAIT Technical
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Case number 2010/A6421: CSARS v Fastmould Specialist CC

Juta Tax Law

An assessment is not always required before SARS can file a certificate with a competent court in an attempt to collect outstanding taxes. On 18 February 2010 SARS filed a certificate with a magistrates' court for outstanding VAT and employees’ tax. On 28 July 2010 the judgment was rescinded. SARS then appealed against the rescission.On the basis of the decision in Singh v CSARS 2003 (4) SA 520 (SCA), the taxpayer argued that SARS could not file a certificate to collect outstanding taxes, before the issuing of an assessment.

The court did not agree. In the case of outstanding VAT no certificate has to be issued. As the taxpayer submitted returns stating its VAT liability and as SARS accepted these returns, no need arose for SARS to issue an assessment. VAT becomes due the moment SARS accepts the correctness of the vendor’s return. In the Singh case it was made clear that SARS may start collection procedures once an amount is due. As in the Singh case an assessment was raised but no notice given to the taxpayer, that case can be distinguished from the present case.

 

To access the case, click here


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