R26 Million VAT Tug-of-War Ends in Court Defeat for Clearing Agent

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One of the largest VAT refund battles in recent memory has come to a close—and accountants across the country should take note.

In the Tax Court case Appellant Southern Africa (Pty) Ltd v SARS, a clearing agent learned the hard way that you can’t claim VAT refunds for your client’s imports, even if you fronted the cash.

The Background

Appellant Southern Africa acted as clearing agent for BIV Gold (Pty) Ltd, which imported over R157 million worth of gold coins from the UK in 2018. After mistakenly believing the coins were VAT-exempt, the agent paid R26 million in import VAT once SARS flagged the omission.

But when the deal between BIV and its UK supplier was later cancelled and the coins returned abroad, Appellant Southern Africa tried to claim the import VAT back arguing it was either a “responsible third party” or acting as a “representative taxpayer.”

The Dispute

SARS rejected the refund claim, saying only BIV, the actual importer, could claim the VAT. The clearing agent insisted it was entitled due to having paid the VAT and sought relief under various sections of the VAT Act and Tax Administration Act.

It didn’t help that BIV had washed its hands of the situation, refusing to pay or claim the VAT, blaming the clearing agent for the costly blunder.

The Ruling

The court sided decisively with SARS. It ruled that:

• VAT paid on imports is strictly the liability of the importer—in this case, BIV.

• The clearing agent was never legally responsible for the VAT and had no right to a refund.

• There was a clear “importation” for VAT purposes once the goods landed and were declared, even if they were later exported.

• Attempts to reframe the transaction as a domestic supply or adjustment failed.

Not only did the court dismiss the appeal, it ordered the agent to pay SARS’ costs—including those of two senior counsel.

Why It Matters

This ruling reinforces a critical point, clearing agents are not entitled to input VAT refunds unless they are the actual importer. Accountants advising clients in logistics, trade, or customs need to ensure VAT registrations, declarations, and documentation are airtight and aligned.

Got a client who’s fronted VAT for someone else’s goods? Tell them to stop right there. SARS, and the courts, won’t back them up.