SARS Rejecting Input VAT on Prepaid Electricity Purchased through Online Banking (ABSA)

[Alandt]

Hi All,

Hope everybody is good in health and spirit and keeping safe throughout these times...

I would like to get some of your thoughts on an issue I have with SARS disallowing the Input VAT on Prepaid Electricity that was purchased for business use, from ABSA Online Banking...

Due to COVID and that, the business has been taking quite a hit and mostly only have Input VAT that is refundable from SARS, but now SARS has rejected the Input VAT claimed from Prepaid Electricity on my 202011 VAT Period, after supplying them with the "Notification of Purchase" that was printed from the bank's (ABSA) online system, it contains the amount of electricity purchased, as well the VAT Amount listed separately, and then the total number of units received.

SARS simply rejected this as it is an "Invalid Tax Invoice" - and as the value of the transaction is really small (this one, in particular, was R 200).

Is a full tax invoice required to claim Input VAT this in particular, and if so, does anybody perhaps know of a way that I can obtain them from ABSA? I can't find any other form of proof/document other than the Notification of Purchase from their Online Banking...

I would like to resolve this before I move on to the following periods' audits (202101 and 202103) which are also in progress, and there is also Prepaid Electricity purchased from the bank claimed as Input VAT on them...

Any input or thoughts on the above would be greatly appreciated!

Thank you in advance.

[Justloadit]

From what I can remember, been out of the prepaid game for a good few years, ABSA bank will not issue you an invoice, as they only acted as the facilitator for the sale of the Electricity.
Ultimately ESKOM, or the Municipality is the principle vendor of the electricity. Same as if you purchase the electricity through an ATM terminal, or an agent using a vending terminal.

There was also legislation which stated, that only ESKOM or the municipality was allowed to vend electricity - this could have changed due to private companies supplying power.

Theoretically you have to get the invoice from either ESKOM or municipality direct. Anyway good luck with that.

I do stand to be corrected, but I cannot see any reason why the manner in which prepaid electricity is sold would have changed in the meantime, as the manner in which the transaction occurs has not changed.

[Andromeda]

If the amounts is R50 and less, you do not require a tax invoice. In all other cases you do, although for amounts up to R3000 and abridged tax invoice will suffice.

[Alandt]

Thank you! I've found a "Receipt Reference No" on the notification of purchase from ABSA, then proceeded to contact the municipality (thankfully I know somebody who works there), and they have provided me with the Credit-Vend Tax Invoices.

Submitted them with other docs to SARS, so will await and see what the outcome is!