Commissioner for the South African Revenue Service (SARS) Dr Johnstone Makhubu has welcomed the unanimous judgment of the Constitutional Court in Lueven Metals v Commissioner for the SARS, which confirms SARS’ interpretation of Section 11(1)(f) of the Value-Added Tax Act.
In a media release, SARS explains that the judgment clarifies that the zero-rating of gold supplied to the South African Reserve Bank, the South African Mint Company or a registered bank applies only where the gold is supplied in one of the prescribed forms and has not undergone any manufacturing process other than refining or the manufacture or production of those prescribed forms.
The court confirmed that the zero-rating of gold under Section 11(1)(f) does not apply to second-hand or recycled gold that has already undergone prior manufacturing.
SARS says this ruling provides clear legal guidance, puts an end to aggressive value-added tax (VAT) interpretations and reinforces SARS' commitment to enforcing tax law in a principled manner.
SARS says this judgement aims to protect the tax base and safeguard revenue for the benefit of all South Africans.
