[Question] SARS won't allow client to claim Input VAT on the Installment Sale Agreement

[Wildsniper911]

I have question in this regard, here is the scenario:

The client was in the process of registering for VAT, in the mean time he purchased Capital goods through an Installment Sale Agreement. We submitted his VAT return and he was selected for an audit, now here is where the big problem comes in the bank doesn't want to co operate and issue a duplicate ISA or tax invoice with the client's VAT number. We submitted the supporting documents as is and explained to SARS the situation, unfortunately they cannot allow it due to the fact that the VAT number not appearing on the ISA.

I tried asking the SARS branches and they were not much help.

What can I possibly to resolve this issue?

[Brett Nortje]

I have question in this regard, here is the scenario:

The client was in the process of registering for VAT, in the mean time he purchased Capital goods through an Installment Sale Agreement. We submitted his VAT return and he was selected for an audit, now here is where the big problem comes in the bank doesn't want to co operate and issue a duplicate ISA or tax invoice with the client's VAT number. We submitted the supporting documents as is and explained to SARS the situation, unfortunately they cannot allow it due to the fact that the VAT number not appearing on the ISA.

I tried asking the SARS branches and they were not much help.

What can I possibly to resolve this issue?

Well, if i was you, i would pay the vat on those goods, or return them. after that they could buy them again? this would be after getting a sales number, unless they opened them. if they opened them, sell them to someone else after putting it back together!

Alternatively, if cash flow is low, you could damage them and send them back?

Or, you could try to swap them at a good price to some vendors? i mean the people that are not prepared to go all the way to the factory, you know, the people that will pay 'cost price' for them?

[Christel]

Can the bank not do a letter with the client's vat number on and explain why they cannot re-issue the HP agreement. Else, ask the bank to write the number on and sign next to it with the bank stamp on.... you have 5 years to claim VAT on purchases.

[Dave A]

How about claiming the VAT portion on the value of the fixed asset upon conversion to registered VAT vendor, along with stock, fixtures and fittings etc. held at the time?

[Wildsniper911]

Can the bank not do a letter with the client's vat number on and explain why they cannot re-issue the HP agreement. Else, ask the bank to write the number on and sign next to it with the bank stamp on.... you have 5 years to claim VAT on purchases.

I did that with another client who forgot to give their VAT number, the bank manager wrote the VAT number on the ISA, stamped and signed it , after I submitted it the auditor let me know that it was not correct and possibly fraud they disallowed it, but they didn't levy a 25% penalty so I can't understand why they would then claim it to be fraudulent.

I didn't think about a letter from the bank though I will give that a try.

Thank you

[dellatjie]

Wildsniper911, did you manage to claim the VAT?