Modern Quarrying Q3 2019

KEY TAKEAWAYS

At several operations, most information relevant to the diesel rebate system is recorded, but not compiled into the required format

As a rule, a two-year period is covered in the SARS audit. When deficiencies are revealed the entire period is reversed and the full amount becomes payable. For smaller operators this can equate to around R200 000

The volumes of diesel used within the quarrying and mining context are usually large. The cash back factor (on every VAT return) is significant

If a quarry uses 100 000 ℓ in defined eligible activities, per month, and 80% being 80 000 ℓ , with the current rate of R3,327 applied, the rebate for one month would equate to R266 160

R200 000. For some bigger operations, it can run into several millions of rands,” adds Hancock. He adds that typically the response to this scenario by operations is to stop claiming. The assessment goes unchallenged and future claim bene- fits are voluntarily lost. “I have found that challenging the audit findings can result in the recovery of some or all of the intended reversal,” he says. What does the legislation say? Legislation allows certain industry sectors to recover Fuel Levy and Road Accident Levy from diesel purchases in accordance with certain legislated parameters. These activities are iden- tified largely based on the fact that vehicles utilised are not essentially road users. The industries selected are also major economic contributors. “The legislation defines activities

administrative burden of the logging requirements. In his dealings with several quarries, he has noted that most information relevant to the diesel rebate system is recorded, but not compiled into the required format. “Most have a form of record keeping but it does not conform to the specific requirements. Claims are often made on the purchase totals rather than the usage record. When SARS makes con- tact to set up an audit, people usually become concerned and that’s when they only reach out for assistance,” says Hancock. “For those that do not get the nec- essary help, the audit usually results in massive reversals. As a rule, a two-year period is covered in the audit. When deficiencies are revealed the entire period is reversed and the full amount becomes payable. For smaller operators this can equate to around

Andrew Hancock, consultant at CustomEx.

use roads. However, Hancock says several operations are missing out on potential gains because many of them are put off by the perceived

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QUARTER 3 - 2019 MODERN QUARRYING