Mukuru Africa (Pty) Ltd v Commissioner for the South African Revenue Service

Mukuru Africa (Pty) Ltd, a registered VAT vendor, supplies both taxable and exempt services, including money transfers and bureau de change services. Because it makes mixed supplies, it is required under section 17(1) of the Value-Added Tax Act 89 of 1991 to apportion input VAT. From commencement of business on 1 February 2014, Mukuru applied the standard turnover-based (STB) apportionment method prescribed in Binding General Ruling 16 (BGR16). In February 2017, Mukuru applied to SARS for approval to use an alternative transaction count (TC) method with retrospective effect from 1 February 2014. SARS approved the TC method only from 1 March 2016, taking the view that proviso (iii) to section 17(1) prohibited retrospective approval beyond that date. Mukuru objected and ultimately appealed to the Tax Court, which dismissed its appeal. Mukuru then appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel.

The judgment clarifies the operation of section 17(1) of the VAT Act and the legal status of Binding General Rulings in VAT apportionment. It confirms that the default turnover-based method applies to all vendors unless an alternative method is formally approved, and that SARS’s power to approve changes in apportionment methods retrospectively is strictly limited by statute. The case reinforces legal certainty and administrative control in VAT apportionment.