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 to pay Value Added Tax (VAT) on payments it received for actual services rendered to provincial health departments. The Supreme Court of Appeal held that these payments constituted taxable supplies under section 7(1) of the Value Added Tax Act 89 of 1991, and that the Trust was not exempt from VAT on those payments, although subsidies deemed to be supplies under section 8(5) could be zero-rated under section 11(2)(n). The trustees sought leave to appeal to the Constitutional Court, challenging both the VAT interpretation and the Supreme Court of Appeal’s reliance on SARS Interpretation Notes in construing the statute.

Condonation for the late filing of the application for leave to appeal was granted, but the application for leave to appeal was dismissed. No costs order was made, applying the Biowatch principle.

The case is significant for clarifying the limits of judicial reliance on administrative interpretations of legislation in South Africa’s constitutional democracy, particularly in tax matters. It affirms that courts must independently interpret statutes and should avoid deference to unilateral executive interpretations, while also confirming the VAT treatment of welfare organisations providing services to the state.