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Implications Of The Consumer Protection Act On The Sales Record

02 June 2011   (0 Comments)
Posted by: Author: Ettiene Retief
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Implications Of The Consumer Protection Act On The Sales Record

The newly introduced Consumer Protection Act (referred to as ‘CPA’) contains many provisions with regards to warranties, cool-off periods, price display, marketing practices, and many more provisions aimed at protecting the consumer. One such provision is with regards to the sale record that must be issued for every transaction. These provisions are in addition to the ‘Tax Invoice’ requirements as contained in the Value-Added Tax Act (section 20).

Section 26 of the CPA prescribes that ‘a supplier of goods or services must provide a written record of each transaction to the consumer to whom any goods or services are supplied’. The final regulations, as published, fail to provide any minimum sales value or threshold exemption from this requirement.

Section 26(3) of the CPA prescribes that the sales record must include at least the following information:

Supplier’s full name (if not a registered trading name, company or close corporation, then the individual’s name as per their identity document), or registered business name, and VAT registration number, if any; Address of the premises at which, or from which, the goods or services were supplied; Date on which the transaction occurred; Name or description of any goods or services supplied or to be supplied; Unit price of any particular goods or services supplied or to be supplied; Quantity of any particular goods or services supplied or to be supplied; Total price of the transaction, before any applicable taxes (such as VAT); Amount of any applicable taxes (such as VAT); and Total price of the transaction, including any applicable taxes.

Considering the level of information required from a sales document for any goods or services provides or sold to a consumer, many current point-of-sale invoices or till-slips will not be compliant. The requirement to provide the name or description of any goods or services means that a mere abbreviation or general description will not do, nor will ‘to consulting fees’ be sufficient. In fact, some till or point-of-sale systems will not be capable of providing that type of document!

In comparing the sale record requirement with that of a ‘Tax Invoice’ for Value-Added Tax purposes, the additional disclosure that will be required for a full Tax Invoice (when the consideration of the supply is greater is equal or greater than R3 000) are:

Address of the supplier (not the address from which, the goods or services were supplied, but the registered address of the enterprise), The words ‘Tax Invoice’ in a prominent place;

An individual serialised number and the date on which the tax invoice is issued (not the date on which the transaction occurred, but when the tax invoice is issued, which must be within 21 days of the date of supply), The requirement of a full and proper description of the goods or services, which includes where goods are second-hand is similar to the CPA description of goods, but for VAT purposes it must be included on the tax invoice if the goods are secondhand and the name, address and, where the recipient is a registered vendor, the VAT registration number of the recipient.

Where the consideration is less than R3 000, but more than R50, the following particulars are not required with regards to a Tax Invoice for purposes of VAT:

Quantity or volume of the goods or services supplied (however, these particulars are required in terms of CPA sales record) and Name, address and, where the recipient is a registered vendor, the VAT registration number of the recipient.

It may be possible that a sale record be issued in terms of CPA, which will be defined as an ‘invoice’ for VAT purposes and trigger the time of supply (date of liability for output tax), while a tax invoice may be issued within 21 days from the date of supply. It’s important that all suppliers of goods or services review the sale records and invoices issued to ensure compliance.

Source: By Ettiene Retief, Chairman of Tax Committee, SAIPA (Tax Professional)


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