The South African Revenue Service (SARS) has welcomed the Supreme Court of Appeal (SCA) judgment which ended the protracted dispute with Africa Cash & Carry, according to SAnews.gov.za
The judgment comes after an investigation by SARS into the use of sale suppression systems and the manual manipulation of accounting books.
The investigation revealed the under declaration of sales and the manipulation of stock figures and resulted in estimated income tax and VAT assessments, which were disputed by Africa Cash & Carry.
Some of the key legal principles the SCA pronounced on included the powers of the Tax Court to alter assessments under section 129(2)(b) of the Tax Administration Act, as opposed to the power to remit the assessment back to SARS, and an interpretation of what SARS’ onus is when it is required to prove that an estimated assessment is reasonable.
‘The SCA upheld the Tax Court order, which inter alia altered the assessments and confirmed SARS’ imposition of 200% additional tax. The SCA dismissed the taxpayer’s appeal and issued a cost order in favour of SARS.’
SARS has been concerned with the compliance levels within the cash & carry industry, with a particular focus on ‘Ooplang’ schemes involving ‘Ghost Exports’, non-recording of the sale of cellphone airtime, manipulation of loan accounts, claiming fraudulent invoices for VAT and Income Tax purposes, utilisation of intermediary shell companies to create invoices and sales suppression systems.