Question
Dear Madam/Sir
TAXPAYER: ILANGABI INVESTMENTS 12
VAT REFERENCE NO: 4730232248
AUDIT PERIODS: 03/2021 to 06/2023
TAX TYPE: DIESEL REFUND
AMENDED LETTER OF REJECTION / DEMAND
The South African Revenue Service (SARS) sent Letter of Intent dated 17
August 2023 via email to Hennie.
Having fully investigated Client compliance with the diesel refund provisions,
created and governed by section 75 of the Customs & Excise Act, No. 91 of
1964 (‘the C&E Act’), read with Part 3 of Schedule 6 thereto.
1. The investigation into the Client compliance commenced on 15
February 2023
2. Client did not comply with the requirements of the diesel refund
provisions because of which they were not entitled to the diesel refunds
paid to them.
As a result of the above findings, and by virtue of the provisions of sections
47(9), (10) and (11) of (‘the C&E Act), read with section 44(11) (a) thereof, the
Commissioner is entitled to, and hereby disallow refunds (fuel levy and road
accident fund levy) in as far as it was claimed by the client or that the refunds
were not duly claimable, in respect of diesel bought and used by them during
the audit period.
3. Facts (audit findings)
3.1 Logbooks / Proof of Payments / Invoices / Diesel Tank
(i) Logbooks
The Logbook received is only the part of the bowser, showing diesel
dispensed to the assets but it doesn’t show activities or what was the
assets doing. The bowser Logbook has no connections to the tank as it Letter of Demand: Page 5 of 17
does not indicate from which tank the diesel was dispensed from and
how many litres.
No opening and closing balance from the tanks and diesel is not
traceable from purchase to the tanks, to the bowser and to the assets.
The bowser Logbook supplied does not meet the required standard.
Storage Logbook was not provided,
(ii) Proof of Payment
The bank statement provided does not have the name of the client.
The diesel used in the mining operation must be purchased by the client.
(iii) Invoices
Tax invoices for diesel purchases were not provided but proforma
documents which cannot be accepted as tax invoices. The tax invoices
must show the diesel supplier, vat number of the supplier, type of the
fuel which is diesel, name, and address of the buyer, which is the client,
quantity of diesel purchased, price and amount in rand.
The proforma documents is not accepted as tax invoices.
(iv) Diesel tanks
The diesel tanks are placed at Brinkor, the sister company and not at
the mine. The delivery notes are showing diesel as being delivered at
langabi but the tanks are places at Brinkor the sister company that is
manufacturing bricks.
The diesel tanks must be placed at the mine premises.
nor did it comply with the provisions of Note 6 to Part 3 of Schedule No. 6 of
the C&E Act.
The view is based on the following:
The Commissioner is therefore of the view that the distillate fuel in question
were dealt with contrary to the provision of the C & E Act as set out above and
demand all refund which were not duly payable to client in terms of section 75
of the C & E Act.
(i) Logbooks
Only the part of the bowser was Provided, showing diesel dispensed to
the assets but it doesn’t show activities Performed by the assets. The
bowser Logbook has no connections to the tank as it does not indicate
from which tank the diesel was dispensed from and the litres dispensed
are not recorded.
No opening and closing balance from the tanks and diesel is not
traceable from purchase to the tanks, to the bowser and to the assets.
The provided logbook for the bowser does not meet the required
standard.
Storage logbook was not provided.
According to Schedule 6 Part3 Note 6(a)(xi) "logbooks" means
systematic written tabulated statements with columns in which are
regularly entered periodic (hourly, daily, weekly or monthly) records of
all activities and occurrences that impact on the validity of refund claims.
Logbooks should indicate a full audit trail of distillate fuel for which
refunds are claimed, from purchase to use thereof. Storage logbooks
(ii) Proof Of Payment
The bank statement provided does not have the name of the client.
The diesel used in the mining operation must be purchased and paid for by the
client.
Schedule 6 Part 3 Note 6 paragraph (q) (ii) stipulates the requirements for the
“Keeping of books, accounts and other documents for the purpose of this item”
as Purchase documents must be in the name of the user.
Responding to the client’s supporting documents submitted
manually in September 2023
(i) Logbook
The Logbook submitted after the letter of intent, is the same logbook
that the client emailed during the audit , it is still not meeting the
requirements of Schedule 6, as stated in the letter of intent and again
in this letter.
(ii) Proof Of Payment
The bank statement to proof that client purchased the diesel used in
the mine was still not submitted with the other supporting documents
received after the LOI.
(iii) Invoices
Client submitted the invoices from Plus X Petroleum, but the Vat
number on those invoices is for the company called Andisa Katiso
Holdings, the different company with its own registration number.
The invoice is invalid.
(iv) Diesel tanks
Client submitted an affidavit from department of environment stating
that the tanks cannot be placed on mining site.
The requirement of Schedule 6, that diesel must be delivered to the
premised still stands, and in these instances, diesel is also delivered
to Brinkor, the sister company manufacturing bricks and using diesel
in its operation too. It cannot be proven by SARS that the diesel
reached the mining site of Ilangabi Investments 12.
Sincerely
________________ __________________
Given Ramatsitsi Cynthia Mkhwanazi
Auditor Operations Manager
ISSUED ON BEHALF OF THE COMMISSION
Please assist with the outcome letter from the Appeal commity of the South african Revenue Service
TAXPAYER: ILANGABI INVESTMENTS 12
VAT REFERENCE NO: 4730232248
AUDIT PERIODS: 03/2021 to 06/2023
TAX TYPE: DIESEL REFUND
AMENDED LETTER OF REJECTION / DEMAND
The South African Revenue Service (SARS) sent Letter of Intent dated 17
August 2023 via email to Hennie.
Having fully investigated Client compliance with the diesel refund provisions,
created and governed by section 75 of the Customs & Excise Act, No. 91 of
1964 (‘the C&E Act’), read with Part 3 of Schedule 6 thereto.
1. The investigation into the Client compliance commenced on 15
February 2023
2. Client did not comply with the requirements of the diesel refund
provisions because of which they were not entitled to the diesel refunds
paid to them.
As a result of the above findings, and by virtue of the provisions of sections
47(9), (10) and (11) of (‘the C&E Act), read with section 44(11) (a) thereof, the
Commissioner is entitled to, and hereby disallow refunds (fuel levy and road
accident fund levy) in as far as it was claimed by the client or that the refunds
were not duly claimable, in respect of diesel bought and used by them during
the audit period.
3. Facts (audit findings)
3.1 Logbooks / Proof of Payments / Invoices / Diesel Tank
(i) Logbooks
The Logbook received is only the part of the bowser, showing diesel
dispensed to the assets but it doesn’t show activities or what was the
assets doing. The bowser Logbook has no connections to the tank as it Letter of Demand: Page 5 of 17
does not indicate from which tank the diesel was dispensed from and
how many litres.
No opening and closing balance from the tanks and diesel is not
traceable from purchase to the tanks, to the bowser and to the assets.
The bowser Logbook supplied does not meet the required standard.
Storage Logbook was not provided,
(ii) Proof of Payment
The bank statement provided does not have the name of the client.
The diesel used in the mining operation must be purchased by the client.
(iii) Invoices
Tax invoices for diesel purchases were not provided but proforma
documents which cannot be accepted as tax invoices. The tax invoices
must show the diesel supplier, vat number of the supplier, type of the
fuel which is diesel, name, and address of the buyer, which is the client,
quantity of diesel purchased, price and amount in rand.
The proforma documents is not accepted as tax invoices.
(iv) Diesel tanks
The diesel tanks are placed at Brinkor, the sister company and not at
the mine. The delivery notes are showing diesel as being delivered at
langabi but the tanks are places at Brinkor the sister company that is
manufacturing bricks.
The diesel tanks must be placed at the mine premises.
nor did it comply with the provisions of Note 6 to Part 3 of Schedule No. 6 of
the C&E Act.
The view is based on the following:
The Commissioner is therefore of the view that the distillate fuel in question
were dealt with contrary to the provision of the C & E Act as set out above and
demand all refund which were not duly payable to client in terms of section 75
of the C & E Act.
(i) Logbooks
Only the part of the bowser was Provided, showing diesel dispensed to
the assets but it doesn’t show activities Performed by the assets. The
bowser Logbook has no connections to the tank as it does not indicate
from which tank the diesel was dispensed from and the litres dispensed
are not recorded.
No opening and closing balance from the tanks and diesel is not
traceable from purchase to the tanks, to the bowser and to the assets.
The provided logbook for the bowser does not meet the required
standard.
Storage logbook was not provided.
According to Schedule 6 Part3 Note 6(a)(xi) "logbooks" means
systematic written tabulated statements with columns in which are
regularly entered periodic (hourly, daily, weekly or monthly) records of
all activities and occurrences that impact on the validity of refund claims.
Logbooks should indicate a full audit trail of distillate fuel for which
refunds are claimed, from purchase to use thereof. Storage logbooks
(ii) Proof Of Payment
The bank statement provided does not have the name of the client.
The diesel used in the mining operation must be purchased and paid for by the
client.
Schedule 6 Part 3 Note 6 paragraph (q) (ii) stipulates the requirements for the
“Keeping of books, accounts and other documents for the purpose of this item”
as Purchase documents must be in the name of the user.
Responding to the client’s supporting documents submitted
manually in September 2023
(i) Logbook
The Logbook submitted after the letter of intent, is the same logbook
that the client emailed during the audit , it is still not meeting the
requirements of Schedule 6, as stated in the letter of intent and again
in this letter.
(ii) Proof Of Payment
The bank statement to proof that client purchased the diesel used in
the mine was still not submitted with the other supporting documents
received after the LOI.
(iii) Invoices
Client submitted the invoices from Plus X Petroleum, but the Vat
number on those invoices is for the company called Andisa Katiso
Holdings, the different company with its own registration number.
The invoice is invalid.
(iv) Diesel tanks
Client submitted an affidavit from department of environment stating
that the tanks cannot be placed on mining site.
The requirement of Schedule 6, that diesel must be delivered to the
premised still stands, and in these instances, diesel is also delivered
to Brinkor, the sister company manufacturing bricks and using diesel
in its operation too. It cannot be proven by SARS that the diesel
reached the mining site of Ilangabi Investments 12.
Sincerely
________________ __________________
Given Ramatsitsi Cynthia Mkhwanazi
Auditor Operations Manager
ISSUED ON BEHALF OF THE COMMISSION
Please assist with the outcome letter from the Appeal commity of the South african Revenue Service
Answers
GPT-4o mini
[Your Name]
[Your Address]
[City, Postal Code]
[Email Address]
[Phone Number]
[Date]
Appeals Committee
South African Revenue Service (SARS)
[Relevant SARS Office Address]
[City, Postal Code]
Subject: Appeal Against Letter of Rejection/Demand
Taxpayer: Ilangabi Investments 12
VAT Reference No: 4730232248
Audit Period: 03/2021 to 06/2023
Tax Type: Diesel Refund
Dear Appeals Committee,
I am writing to formally submit an appeal regarding the Letter of Rejection/Demand issued to Ilangabi Investments 12 concerning the diesel refund claims for the audit periods from March 2021 to June 2023.
We appreciate the thorough investigation conducted by SARS and acknowledge the complexities involved in compliance with the diesel refund provisions as governed by the Customs & Excise Act, No. 91 of 1964. However, we believe there may have been misunderstandings or misinterpretations of our supporting documentation, and we would like to clarify our position regarding the following points raised in the rejection letter:
1. **Logbooks**:
While we acknowledge the concerns about the bowser logbook not indicating a complete audit trail, we had submitted additional logbooks that documented diesel dispensing for various activities. We will ensure that these documents meet the required standards as stipulated in Schedule 6, Part 3, Note 6(a)(xi) and address any deficiencies highlighted.
2. **Proof of Payment**:
We understand that the bank statement provided lacked clarity regarding the payer. Moving forward, we will provide a revised bank statement evidencing purchases made explicitly by Ilangabi Investments 12, along with any payment confirmations that substantiate these transactions.
3. **Invoices**:
We acknowledge the invoice discrepancies mentioned, particularly regarding the VAT number discrepancy with Andisa Katiso Holdings. We will rectify this by submitting valid tax invoices that comply with all requirements, including proper taxpayer identification and purchase details corresponding directly to Ilangabi Investments 12.
4. **Diesel Tanks**:
While we understand the concerns regarding the placement of diesel tanks and the delivery of diesel to Brinkor, we respectfully submit that all operational procedures were followed based on compliance with environmental regulations. We will produce documentation that substantiates the operational logistics for fuel usage across both facilities, emphasizing the ultimate consumption of diesel in Ilangabi’s mining activities.
In light of the clarifications above, we kindly ask the Appeals Committee to consider this appeal and allow us the opportunity to provide any additional information or documentation necessary for a thorough re-evaluation of our claims. We strongly believe that our requests for diesel refunds are meritorious and within compliance of the prevailing regulations.
We appreciate your attention to this matter and await your response regarding the next steps in the appeals process.
Thank you for your cooperation.
Yours sincerely,
[Your Name]
[Your Position]
Ilangabi Investments 12
[Your Contact Information]
[Your Address]
[City, Postal Code]
[Email Address]
[Phone Number]
[Date]
Appeals Committee
South African Revenue Service (SARS)
[Relevant SARS Office Address]
[City, Postal Code]
Subject: Appeal Against Letter of Rejection/Demand
Taxpayer: Ilangabi Investments 12
VAT Reference No: 4730232248
Audit Period: 03/2021 to 06/2023
Tax Type: Diesel Refund
Dear Appeals Committee,
I am writing to formally submit an appeal regarding the Letter of Rejection/Demand issued to Ilangabi Investments 12 concerning the diesel refund claims for the audit periods from March 2021 to June 2023.
We appreciate the thorough investigation conducted by SARS and acknowledge the complexities involved in compliance with the diesel refund provisions as governed by the Customs & Excise Act, No. 91 of 1964. However, we believe there may have been misunderstandings or misinterpretations of our supporting documentation, and we would like to clarify our position regarding the following points raised in the rejection letter:
1. **Logbooks**:
While we acknowledge the concerns about the bowser logbook not indicating a complete audit trail, we had submitted additional logbooks that documented diesel dispensing for various activities. We will ensure that these documents meet the required standards as stipulated in Schedule 6, Part 3, Note 6(a)(xi) and address any deficiencies highlighted.
2. **Proof of Payment**:
We understand that the bank statement provided lacked clarity regarding the payer. Moving forward, we will provide a revised bank statement evidencing purchases made explicitly by Ilangabi Investments 12, along with any payment confirmations that substantiate these transactions.
3. **Invoices**:
We acknowledge the invoice discrepancies mentioned, particularly regarding the VAT number discrepancy with Andisa Katiso Holdings. We will rectify this by submitting valid tax invoices that comply with all requirements, including proper taxpayer identification and purchase details corresponding directly to Ilangabi Investments 12.
4. **Diesel Tanks**:
While we understand the concerns regarding the placement of diesel tanks and the delivery of diesel to Brinkor, we respectfully submit that all operational procedures were followed based on compliance with environmental regulations. We will produce documentation that substantiates the operational logistics for fuel usage across both facilities, emphasizing the ultimate consumption of diesel in Ilangabi’s mining activities.
In light of the clarifications above, we kindly ask the Appeals Committee to consider this appeal and allow us the opportunity to provide any additional information or documentation necessary for a thorough re-evaluation of our claims. We strongly believe that our requests for diesel refunds are meritorious and within compliance of the prevailing regulations.
We appreciate your attention to this matter and await your response regarding the next steps in the appeals process.
Thank you for your cooperation.
Yours sincerely,
[Your Name]
[Your Position]
Ilangabi Investments 12
[Your Contact Information]