Big changes are happening in the world of diesel rebates, and it’s important for everyone, especially farmers and those in the agricultural sector, to stay in the know. Recently, the Gauteng High Court made decisions in two cases that could have a big impact on how much money stays in your pockets. These changes highlight the need for clear and detailed record-keeping to make sure you get the diesel rebates you deserve without any surprises.
The Gauteng High Court recently delivered judgments in Mbali Coal (Pty) Ltd vs The Commissioner for SARS and Canyon Resources (Pty) Ltd vs The Commissioner for SARS. These cases centered around diesel refund claims under Part 3 of Schedule 6 to the Customs and Excise Act No. 91 of 1964. The court’s decisions underscored the vital role of detailed and precise record-keeping, especially in logbooks, to support claims for diesel refunds.
In both instances, taxpayers faced disallowed diesel refunds due to inadequate records showcasing the eligible use of diesel. The court honed in on the lack of specificity and proof in logbooks concerning the purpose of diesel purchases and their specific application in various activities. The crucial takeaway from these cases is the importance of meeting the criteria outlined in Part 3 of Schedule 6, with a particular emphasis on Note 6, which specifies the need for a full audit trail from purchase to use.
The taxpayers contended that their logbooks met the outlined criteria, providing evidence to support eligible use. However, the court found the documentation lacking in necessary detail, such as a clear narration of purpose and proof of use. Vague descriptions and incomplete logbooks made it challenging to distinguish between eligible and non-eligible usage, ultimately resulting in the disallowance of the diesel refund claims.
Key Takeaway:
Detailed and precise records, as outlined in Note 6 of Part 3 of Schedule 6, are crucial for substantiating diesel refund claims. Logbooks should provide a comprehensive audit trail of distillate fuel, covering its purchase to use. Taxpayers are strongly encouraged to maintain sufficient records to support their claims, as the absence of such documentation may lead to SARS disallowing the full diesel refund claim.Example of what is acceptable, but that the description should have clear detail:
Don’t let the lack of good records leave you without the diesel refunds you deserve.
Do you need help understanding these changes and staying on top of your finances? Contact Dale Petersen on 021 819 7802 or at dpetersen@wauko.com to connect with us.
