Fuel Costs Can’t Be Claimed Without Proof, Says Court
This article will count 0.25 units (15 minutes) of unverifiable CPD. Remember to log these units under your membership profile.
Assmang (Pty) Ltd v CSARS and Others (311/2024)
Assmang (Pty) Ltd, a mining company operating in the Northern Cape, hired contractors to carry out mining work at its Khumani mine. These contractors used diesel, and Assmang applied for diesel fuel rebates under the Customs and Excise Act, claiming eligibility under rebate Item 670.04. SARS rejected the claims, arguing that the diesel didn’t qualify for a refund and demanded repayment of previous rebates. The High Court agreed with SARS. Assmang then appealed to the Supreme Court of Appeal (SCA).
The Issue at Court: Who Pays for the Diesel?
To qualify for the rebate, Assmang needed to prove two things:
That the contracts with the contractors were on a “dry rate” basis, meaning Assmang paid for the diesel directly.
That the diesel was used in actual mining operations, and this usage was backed by proper records.
What the Court Decided
The SCA dismissed the appeal and ruled in favour of SARS, stating:
The contracts were actually “wet rate” – meaning the contractors paid for and used the diesel as part of their service rate.
Assmang’s accounting system tracked diesel issued to contractors, but not how it was actually used – which falls short of legal requirements.
The record-keeping did not comply with the strict conditions of the rebate provisions.
Assmang’s constitutional challenge (arguing it was unfair that SARS doesn’t pay interest on refunds) was dismissed for being late, vague, and not properly supported.
The appeal failed, and Assmang was ordered to pay the legal costs, including for two sets of legal counsel.
Lessons Learned
If a business claims fuel rebates, the agreements must clearly show who pays for the diesel and how it is used. Contracts matter.
Tracking use, not just dispensing, is essential. Diesel must be monitored all the way to its actual application in mining.
Legal arguments must be raised properly. Last-minute constitutional issues with no evidence won’t succeed.
Refunds are not automatic. Failure to meet SARS’s rebate conditions — even technical ones — can lead to serious financial consequences.
This case is a reminder to businesses in mining and logistics: ensure your diesel rebate claims are fully compliant, properly documented, and contractually sound.
