a) Calculate the total VAT payable by or refundable to SuperDuperSaver (Pty) Ltd for the VAT period ending 31 March 2020. Supply brief reasons that address the core issue for each item, in order to support your answer, and indicate with brief reasons where there are no VAT implications. Indicate output and input VAT separately. References to section numbers are not required.

b) Briefly discuss the transfer duty and VAT implications for transaction 3 above, if the only change to transaction 3 was that the building was sold to Mr Sambatha. The transfer duty and VAT implications must be discussed for both the seller and the buyer. Support you answer, where applicable, with reference to section numbers form the Value-Added Tax Act No. 89 of 1991.

Note to student: In Question 2 in the table next to Trading stock bought in Botswana the amount should be R300 000 (not R300 500). Then it will agree with note 6

QUESTION 2 SuperDuperSaver (Pty) Ltd (hereafter referred to as SDS) is a resident company that specialises in the wholesale retail of certain groceries directly to the public. The company is a registered category C vendor for value-added tax (VAT) purposes and has a 31 March financial year-end. The South African Revenue Service (SARS) is satisfied that SDS makes 98% taxable supplies. SDS was incorporated in 2007 by Mr Sambatha. He currently owns 12% of the company's equity shares. Mr Sambatha is not a value-added tax (VAT) vendor. The company's transactions for the VAT period ending 31 March 2020 were as follows (all amounts exclude VAT where applicable, unless specifically stated otherwise): INCOME AND RECIEPTS Notes Amounts R Description Income and receipts Sales of groceries in South Africa Sale of gift vouchers 1 833 3333 2 20 000 Sale of fixed property 3 9 200 000 Donation received 4 2 000 000 Interest earned on bank account 5 6 400 6 300 500 EXPENSES AND PAYMENTS Trading stock bought in Botswana Trading stock bought from local suppliers Trading stock donated 7 400 000 8 60 000 Salaries and bonuses paid 9 1 500 000 Municipal costs 10 173 500 Notes: 1. Included in this sales amount is advance payments of R20 000 received from customers who ordered groceries online on 31 March 2020. The groceries were only delivered and invoiced on 2 April 2020. SDS does not sell any zero-rated items. 2. SDS sells cash gift vouchers in the form of a plastic card that the holder of the voucher can use to pay for any groceries at a future date. SDS fully complies with the requirements of the Consumer Protection Act, No 68 of 2008 (CPA) which obliges the issuer of the gift voucher to honour the gift voucher for at least three years after issue. SDS's accountant therefore raised a liability in the accounting records which will remain until the gift vouchers are used or expire. At 1 March 2020 there was no unused or expired gift vouchers while the value of gift vouchers used by customers during March 2020 totalled R13 000 and was correctly included in the sales amount in note 1 above. 3. SDS signed a sales contract for one of their underutilised buildings on 5 March 2020. The sales price was R39 000 000 (open market value was R46 000 000 including VAT) and the buyer is a vendor who is not a connected person in relation to SDS. The buyer will only use the building to make taxable supplies. By 31 March 2020 the buyer had paid R9 200 000 as agreed in the purchase contract although the property was not registered in the buyer's name yet. 4. SDS received a cash donation from an ex-employee who won the national lottery. The ex- employee requested that SDS pay some of the money as bonuses to the current staff (see note 9 below) 5. SDS as a cash generating business earns interest on their bank account. 6. SDS imported trading stock from Botswana since the South African suppliers has labour unrest and could not supply SDS. The trading stock purchased from Botswana entered South Africa through the official border post on 25 March 2020 and was delivered to SDS on 30 March 2020. The customs value was established at R300 000 when cleared by customs on 25 March 2020. 7. The trading stock bought during the current period was all new stock. The suppliers are all registered vendors except for trading stock amounting to R50 000 (included in the above amount) which was bought from an upcoming small business who is not a registered vendor. 8. SDS made a donation of trading stock (cost price R60 000 and open market value R80 000) to a school on 31 March 2020. The school is not registered PBO and SDS did not get any promotional or marketing benefit from the donation. 9. The salary account is higher than normal for March 2020 since SDS honoured their pledge to pay out bonuses to staff (also see note 4 above). 10. The municipal costs for the month of March 2020 consisted of the following items: Water R58 000 Sewerage and refuse removal R31 000 Electricity R66 500 Property tax R18 000 R173 500 QUESTION 2 SuperDuperSaver (Pty) Ltd (hereafter referred to as SDS) is a resident company that specialises in the wholesale retail of certain groceries directly to the public. The company is a registered category C vendor for value-added tax (VAT) purposes and has a 31 March financial year-end. The South African Revenue Service (SARS) is satisfied that SDS makes 98% taxable supplies. SDS was incorporated in 2007 by Mr Sambatha. He currently owns 12% of the company's equity shares. Mr Sambatha is not a value-added tax (VAT) vendor. The company's transactions for the VAT period ending 31 March 2020 were as follows (all amounts exclude VAT where applicable, unless specifically stated otherwise): INCOME AND RECIEPTS Notes Amounts R Description Income and receipts Sales of groceries in South Africa Sale of gift vouchers 1 833 3333 2 20 000 Sale of fixed property 3 9 200 000 Donation received 4 2 000 000 Interest earned on bank account 5 6 400 6 300 500 EXPENSES AND PAYMENTS Trading stock bought in Botswana Trading stock bought from local suppliers Trading stock donated 7 400 000 8 60 000 Salaries and bonuses paid 9 1 500 000 Municipal costs 10 173 500 Notes: 1. Included in this sales amount is advance payments of R20 000 received from customers who ordered groceries online on 31 March 2020. The groceries were only delivered and invoiced on 2 April 2020. SDS does not sell any zero-rated items. 2. SDS sells cash gift vouchers in the form of a plastic card that the holder of the voucher can use to pay for any groceries at a future date. SDS fully complies with the requirements of the Consumer Protection Act, No 68 of 2008 (CPA) which obliges the issuer of the gift voucher to honour the gift voucher for at least three years after issue. SDS's accountant therefore raised a liability in the accounting records which will remain until the gift vouchers are used or expire. At 1 March 2020 there was no unused or expired gift vouchers while the value of gift vouchers used by customers during March 2020 totalled R13 000 and was correctly included in the sales amount in note 1 above. 3. SDS signed a sales contract for one of their underutilised buildings on 5 March 2020. The sales price was R39 000 000 (open market value was R46 000 000 including VAT) and the buyer is a vendor who is not a connected person in relation to SDS. The buyer will only use the building to make taxable supplies. By 31 March 2020 the buyer had paid R9 200 000 as agreed in the purchase contract although the property was not registered in the buyer's name yet. 4. SDS received a cash donation from an ex-employee who won the national lottery. The ex- employee requested that SDS pay some of the money as bonuses to the current staff (see note 9 below) 5. SDS as a cash generating business earns interest on their bank account. 6. SDS imported trading stock from Botswana since the South African suppliers has labour unrest and could not supply SDS. The trading stock purchased from Botswana entered South Africa through the official border post on 25 March 2020 and was delivered to SDS on 30 March 2020. The customs value was established at R300 000 when cleared by customs on 25 March 2020. 7. The trading stock bought during the current period was all new stock. The suppliers are all registered vendors except for trading stock amounting to R50 000 (included in the above amount) which was bought from an upcoming small business who is not a registered vendor. 8. SDS made a donation of trading stock (cost price R60 000 and open market value R80 000) to a school on 31 March 2020. The school is not registered PBO and SDS did not get any promotional or marketing benefit from the donation. 9. The salary account is higher than normal for March 2020 since SDS honoured their pledge to pay out bonuses to staff (also see note 4 above). 10. The municipal costs for the month of March 2020 consisted of the following items: Water R58 000 Sewerage and refuse removal R31 000 Electricity R66 500 Property tax R18 000 R173 500