# Regulatory Compliance Category > Tax Forum > [Question] VAT - The price you see is the price you pay ?

## Artvark

Can anyone tell me how it is possible that the NCR(National Credit Regulator)
can claim it is excempt from the following VAT clause?
-
"PRICES DISPLAYED, ADVERTISED OR QUOTED

An increasing number of advertisements placed show prices that do not include VAT. When you place an advertisement, it is your responsibility and not that of the publisher to ensure that the prices advertised include VAT. It is acceptable to show the price excluding VAT, the amount of VAT and the price including VAT as long as each is displayed with equal prominence. The same principle applies when marking goods for display or issuing quotes. If you do not follow this rule and there is a dispute, the price that is indicated will be taken as including VAT and you could suffer financial loss."-

In my opinion this clause was made specifically to clear up any disputes as to how prices should be displayed. I have received an opinion form SARS themselves saying they agree with me, that if you state a price without mention VAT, it inlcudes VAT, yet a binding VAT ruling would set me back R2500. 

Do I have any other options here? In my opinion EVERYONE should follow the price you see is the price you pay VAT clause. But how do I get the NCR to admit this fact?

Any help or advice would be greatly appreciated.

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## BusFact

How much money are you talking about? My experience in fighting government organisations is that there must be a lot of money involved or you must be really passionate about getting your way. If you're just trying to make a point, its going to be a losing battle - and a frustrating one.

Can't offer you any solid solutions to get them to back down, I'm afraid

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## SilverNodashi

I hate it when someone quote you for something @ Rx, but then you need to pay Ry cause they failed to mention it's VAT exclusive. It's probably not a big deal on R5 or R10 purchased, but imagine on R10,000 - for which many people need to budget out of their own pockets if it's for personal use?

How does a consumer hold a supplier (let's say it's Pick `n Pay, for example) responsible for this?

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## sterne.law@gmail.com

Despite that clause which did actually have a specific purpose, the following is relevant -

A displayed price is merely an offer. That is to say that no seller needs to honour that price. The buyer and the seller are free to negotiate, so to speak. Our contract law is very clear. Hence I can defend that the R2000 price displayed was merely an offer and the final price was R2280-00. If one wants to ask why if a law is so clear can it not be enforced? It happens that when legislation is drawn up it may conflict with other laws in which case one or the other will trump the other law.

Not even in the new Consumer Protection Act is the "price displayed is the price you pay" enforced. 
There may be opportunity in terms of misleading advertising or bait marketing, but these are seperate issuess to the displayed price.

It is not as clear cut as this, but it should give you an indication that you are on a losing streak.  :Slayer:

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BusFact (29-Jul-10), Dave A (28-Jul-10)

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## Dave A

Anthony, you post has just solved a problem I've struggled with for a while - special thanks.

I think this should be born in mind when applying the principle though:



> I hate it when someone quote you for something @ Rx, but then you need to pay Ry cause they failed to mention it's VAT exclusive.


Changing the price is potentially harmful to the goodwill relationship with your client and could be harmful to your reputation if not managed correctly. Legal redress difficulty issues aside, it's plain sloppy and bad practice not to clarify that VAT is an add-on if you're quoting VAT exclusive prices.

Government for now may not care about goodwill issues when it's dealing with their subjects clients, but it's an account that runs anyway whether you pay attention to it or not. The chickens will come home to roost one day.

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## Artvark

As stated, I have asked SARS for their opinion on this specific matter and they have agreed that if a price does not mention VAT it does include VAT. - What everyone here seems to be telling me is that in this instance SARS carries no weight ? (Which is kind of logical, coz it would mean that they would be saving you money in this case and that means you can't take them seriously. lol. )

I have also contacted the Banking Ombudsman for their opinion but they are truly pathetic(Is there a word worse than pathetic?). Top Senior Management there are trying to tell me that other similar prices have been used without adding VAT for 39 years. Yip. 39 years ! One can't argue with the fact that Vat would not have been charged way back even before it was ever invented..(1993 by the way)

In my personal loans capacity we are talking at about R7000-ish. But one can imagine if I do manage to get them to budge(which I agree is doubtful) what kind of fall out this would have. All personal loans ever done by my bank since 2005(Credit Act came into play) would need to contact their clients and offer them refunds as they would have illegally charged VAT on a price that included VAT already.

I have some time on my hand. And if anyone can think of any way I can get an inch ahead. It would be awesome. Wouldn't you love to see the little guy win for once ?

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## wynn

The reason most quotations exclude VAT and add it on at the end is because most contractors/service providers claim their input back so the price they see before VAT is the price they use to calculate their cost and markup on the materials or services.

It saves having to calculate the VAT component on every item, just one calculation at the end of the excersize and you have your input and output, the difference is the portion you pass on to SARS when you invoice or get paid.

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## Artvark

Hi Wynn

Yes all of this is covered by the VAT act. The fact that basically only the end user(buyer) would be resposnible for the tax or the VAT. It then continues to add that

 -    ". It is acceptable to show the price excluding VAT, the amount of VAT and the price including VAT as long as each is displayed with equal prominence. The same principle applies when marking goods for display or issuing quotes. If you do not follow this rule and there is a dispute, the price that is indicated will be taken as including VAT and you could suffer financial loss.
-

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## wynn

Not including Vat in your Quote or Price and failing to mention it and then charging it later is surely a recipe for a failure of future business?

But surely everybody who expects to get VAT included in their Quote / Price puts it in the following way

price one
price two
price three
sub-total
VAT @ 14%
Grand Total

if someone quotes me a price and fails to mention VAT included or excluded I will query it.

Different kettle of fish when you shop at the supermarket or check the menu at a restuaraunt.

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