Company slammed with R40m SARS bill
A company looking for legal clarity from the SARS about its tax affairs ended up with an adverse ruling against it, with the taxman looking to recover R39.6m.
The ruling came down in a judgment from the SCA on 29 August 2025, whereby a major Northern Cape mining group was disentitled from claiming rebates on diesel.
This resulted in the group being ordered to pay SARS R39.6m, including interest and penalties.
According to Tax Consulting SA, the issue stemmed from the company’s auditors approaching SARS for an advance tax ruling.
In this specific case, the auditors approached SARS for a ruling on whether a diesel refund in respect of contractors could be claimed.
This then triggered SARS to initiate a robust compliance audit of the company’s operations.
BusinessTech reports that SARS then detected a ‘risky tax treatment strategy’ and proceeded to conduct a broader diesel refund audit.
The company then appealed the audit with the SCA, leading to the judgment against the taxpayer.
The SCA’s judgment’s core focus was the company’s claim for diesel refunds, with the primary dispute revolving around whether its contracts with its mining service providers were on a ‘wet’ or ‘dry’ basis.
Tax Consulting said that the ruling should serve as a clear warning to all taxpayers to always ensure full compliance with tax Acts and to ensure correct record-keeping.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
