South Africa: Vendor may appeal ruling allowing use of alternative method of apportionment not requested by vendor (Supreme Court of Appeal decision)
Vendor allowed to appeal ruling under section 32(1)(a)(iv) of the Value Added Tax (VAT) Act
The Supreme Court of Appeal on July 8, 2025, held that under section 32(1)(a)(iv) of the Value Added Tax (VAT) Act, a vendor has the right to appeal a ruling issued by the South African Revenue Service (SARS) allowing the vendor to use an alternative method of apportionment when the vendor did not request use of the particular approved method.
The case is: Commissioner for South African Revenue Service v. African Bank Limited (242/2024)[2025] ZASCA 101
Under section 17(1)(iii) of the VAT Act, vendors are required to apply to SARS for a ruling to use an alternative method of apportionment if the standard turnover-based method (or a previously approved alternative method) does not yield equitable results. Section 32(1)(a)(iv) of the VAT Act allows vendors to appeal if SARS refuses to approve a method.
In this case, SARS argued that because it approved an alternative method, albeit not the method requested, the vendor was not allowed to appeal the ruling. The court rejected SARS’ interpretation on the grounds that the purpose of section 32(1)(a)(iv) is to provide remedies to vendors aggrieved by SARS’ decision not to issue a ruling in respect of the method requested.
Read a July 2025 report prepared by the KPMG member firm in South Africa