South Africa’s farmers are not alone in getting diesel rebates. Ireland, Australia, New Zealand (where petrol too can be claimed for) and many other countries offer some form of fuel price relief for farmers engaged in primary production.
So when SARS makes it almost impossible to receive the rebate or conducts multiple audits, it could be said to be advancing the cause of our international competitors!
It is clear from Note 6(h)(iv)(aa) of the 6th Schedule to the Customs and Excise Act that the delivery by a contractor on a ‘dry’ basis (the farmer pays for the fuel) to the factory gates is within the scope of the rebate.
But does the farmer or the contractor have to fill up on the farm to obtain the rebate?
SARS seems to interpret Section 75(1C)(a)(iii) of the Customs and Excise Act as stating that a farmer cannot receive a rebate for diesel purchased at the factory gates.
The section holds that SARS may investigate any application for a refund in order to establish if the fuel has been:
“(i) duly entered or is deemed to have been duly entered in terms of this Act;
(ii) purchased in the quantities stated in such return;
(iii) delivered to the premises of the user and is being stored and used or [my italics] has been used in accordance with the purpose declared on the application for registration and the said item of Schedule 6.”
Note the use of the conjunction ‘or’. If the words are to be interpreted to mean that only fuel delivered is worthy of rebate, then the phrase “and used” is tautological (superfluous).
Of course the fuel is going to be used! And there is a common-law presumption against the use of superfluous words in a statute.
Surely the subsection provides for the claimable use of diesel used in accordance with the declared purpose – as is the case with fuel purchased at the factory gates when the dry-basis contractor fills up on the farmer’s account?
The conjunction ‘or’ differentiates between fuel stored and used.
That is, between fuel delivered to the farm and fuel simply used, such as fuel purchased at the factory, (which is not stored on the farm).
Were it not so, you would have the bizarre situation where farmers from very far-off places would be ineligible for the rebate, because their lorries might not have the range to make it back to the farm to fill up!
The law on the rebate is in plain English and is not at all complicated.