Marshall and Others v Commissioner for the South African Revenue Service

The applicants were trustees of the South African Red Cross Air Mercy Service Trust, a welfare organisation providing air ambulance and related services to provincial health departments. The South African Revenue Service (SARS) assessed the Trust as liable for Value Added Tax (VAT) on payments received for actual services rendered. The Trust contended that these payments were exempt or zero-rated under sections 8(5) and 11(2)(n) of the Value Added Tax Act 89 of 1991. The Supreme Court of Appeal held that the Trust was liable for VAT on actual services supplied, although subsidies deemed to be supplies under section 8(5) were zero-rated. The Trust sought leave to appeal to the Constitutional Court, challenging both the VAT interpretation and the SCA’s reliance on SARS Interpretation Notes.

Condonation for the late filing of the application for leave to appeal was granted; the application for leave to appeal was dismissed. No costs order was made.

The case is significant for clarifying the limits of judicial deference to administrative interpretations of legislation in South African constitutional law. It emphasises that courts must interpret statutes independently and objectively, particularly where administrative interpretations are unilateral and advanced by a litigant. The judgment also provides authoritative guidance on the VAT treatment of welfare organisations supplying services to the state, distinguishing between taxable supplies and zero-rated deemed subsidies.