In the recent case of Aveng Mining Shafts & Underground v CSARS (1192/2023) [2025] ZASCA 20, the Supreme Court of Appeal (SCA) delivered a strong message to businesses: input VAT deductions require a clear legal foundation. Aveng Mining attempted to claim nearly R17.5 million in input VAT for accommodation and meal expenses provided to employees working in remote mining locations. The company argued that these expenses were necessary for operational continuity.
However, the SCA ruled in favour of SARS, holding that such expenses did not qualify for input VAT deductions under the VAT Act. The Court emphasised that operational necessity alone does not meet the statutory requirements – expenses must be directly connected to the making of taxable supplies and not constitute private or exempt use.
This judgment is a caution to all businesses: input VAT claims must align with the VAT Act’s provisions, regardless of how essential the expense may seem from a business perspective.
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