Vat on Prepaid Sub Meter

[Manko]

I've ask prepaid sub meter service provider for some cost of using their service: User will purchase units of R100 and the breakdown is R100 minus 14% service charge, R86 minus 15% vat, R73,10c worth of units will be loaded to the user n i get the money to pay the electricity of with i get charge vat again.
This guys are not suppose to charge vat on the R14 service charge or i'm missing something here

[Justloadit]

Correct.
Let them know that you will contact SARS, and they will very quickly stop.

They can not charge you VAT, as they are simply a service enabler, the VAT is paid at the source of the sale when the voucher is generated, either by ESKOM direct, or the municipality you fall under.If they do not reconsider, then simply call SARS to sort the problem out.

What they can charge you VAT for is on the commission that they get from the sale, as this part is 'Vatable', between 0.25% to 1.5% , depending on the municipality or ESKOM, or in some areas R 0.75c per transaction irrespective of the value of the sale. This is the reason very few companies vend prepaid electricity on their platforms. Just not worth the effort.