Vat refund late – can we still nail SARS for interest?
Question
SARS should have refunded an amount to us on 22 October 2010 but only paid on 25 November 2010 – it had the incorrect banking details for our business. No interest was added onto the payment even though it was late. Can I push for the interest? Or is SARS off the hook because of the error?
Answer
Remember that under the Vat Act, SARS won’t make a refund of Vat to a vendor, unless the vendor has informed SARS in writing of its correct banking details (section 44(3)(d)). So if it’s your fault that SARS had the wrong banking details, consider yourself lucky to have received the refund at all.
Remember that SARS must inform you in writing within 21 business days of receiving a Vat return, of its reason for not paying the refund. From a practical point of view, once the 21 business days have expired and SARS has received the correct banking details, SARS will be liable for interest unless the refund is made promptly.
