From July 4 this year, the farming, mining, rail freight hauliers and the National Sea Rescue Institute will qualify for diesel refunds.
At present, only the fishing and coastal shipping industries enjoy the diesel fuel concession.
SARS Commissioner Pravin Gordhan said this diesel concession was aimed at enhancing the competitiveness of these sectors.
In line with the announcement by the Minister of Finance during his Budget speech, the following rates would apply:
The concession comprises 100% of the fuel levy (81.0 cents per litre) and the road accident fund levy (16.5 cents per litre).
Calculation of the refund claim:
| 100% fuel levy | 81.0 cent per litre |
| 100% road accident fund | 16.5 cent per litre |
| Total concession | 97.5 cent per litre |
The fishing, coastal shipping, offshore mining and the National Sea Rescue Institute will qualify for this refund.
The concession comprises 31.6% of the fuel levy and 100% of the road accident fund levy on qualifying consumption. Qualifying consumption is 80% of diesel purchases for production purposes.
Calculation of the refund claim:
| 31.6% of the fuel levy | 25.6 cent per litre |
| 100% of the road accident fund | 16.5 cent per litre |
| Total concession | 42.1 cent per litre |
Example:
Farmer purchase 100 000 litres of which 60 000 is for qualified use (primary production purposes). 40 000 litres is for other use (domestic, transport for reward).
Calculation of refund on example:
| 100 000 litres - 40 000 litres | 60 000 litres |
| 60 000 litres x 80% x 42.1 cent | R 20 208.00 |
| Total concession | R 20 208.00 |
The farming, forestry and mining industries will qualify for this refund.
The concession comprises 100% of the road accident fund levy being 16.5 cent per litre.
Calculation of the refund claim:
| 100% of the road accident fund | 16.5 cent per litre |
| Total concession | 16.5 cent per litre |
The above concessions will be granted as a refund, utilising the Value Added Tax (VAT) system. The Diesel Refund System will also apply to the fishing and coastal shipping industries effective from July 4 2001 which is currently receiving their concession as a rebate on purchases.
The VAT computer system is currently being adapted to make provision for diesel refund claims. To ensure control over claims, those VAT vendors who intend to claim refunds on diesel will be required to furnish certain information before claims will be processed. It is planned that the forms requesting this information will be made available during April 2001 for submission and processing during May and June 2001.
The VAT monthly return (VAT 201) will be adjusted to accommodate the calculation of the diesel refund claim. A claim can either increase a VAT refund or reduce the liability in a specific tax period. SARS will offset the possible credit (dependant on audit) against that specific periodĘs VAT liability or any other outstanding taxes or levies administered by SARS. Furthermore claims will be processed on the system but the refund will not be allowed if the claimantĘs full tax affairs are not in order. Full tax affairs imply taxes, levies and returns in respect of VAT, PAYE, Income Tax, Customs and Excise and Skills Development Levy.
Potential claimants, therefore, need not do anything at this stage (except getting their tax affairs in order). During April 2001 SARS will communicate with potential claimants on the additional information to be supplied to SARS.
Enquiries regarding the "diesel refund scheme" can be e-mailed to SARS at dieselrefund@sars.gov.za
Telephonic enquiries may be addressed to:
Andre Joubert Tel: (012) 422 6921/19 Cell: 082 459 3781
Anton Laubscher Tel: (012) 422 4275 Cell: 082 445 3152
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
PRETORIA