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Diesel refunds in farming

How do I access the Diesel Refund Scheme?

Farming is a qualifying activity under the Diesel Refund Scheme. Most farming enterprises will qualify to be registered for the Diesel Refund Scheme. The person carrying on the farming enterprise may therefore apply for registration for the Diesel Refund Scheme, provided the enterprise is registered for VAT. The Diesel Refund Scheme is currently administered through the VAT system, hence, the requirement that VAT registration is a pre-requisite for participation in the scheme.

If the person is already registered for VAT as a vendor, then registration for the Diesel Refund Scheme can be made by completing and submitting a VAT 101D form
If the person is not registered for VAT as a vendor, then registration for VAT as a vendor and registration for the Diesel Refund Scheme can be made simultaneously by completing and submitting a VAT 101 and VAT 101D forms, respectively. Note that these registrations still depend on whether the other remaining requirements for VAT registration and the Diesel Refund Scheme are complied with. 

How do I claim for a diesel refund?

Refunds under the Diesel Refund Scheme are merely processed by utilising the VAT administrative system. The concession is actually granted to qualifying purchasers under the Customs and Excise Act.
Once registered, the claim for a diesel refund will be made using the VAT201 return which is available on eFiling. A diesel refund claim will be offset against any VAT liability that is payable for the tax period concerned, or alternatively, the diesel refund claim will increase any VAT refund that is due to the vendor.
It is important that all the relevant documentation is kept relating to diesel purchases as well as the various log book entries or other records which indicate the actual amounts of diesel drawn from stock for eligible and non-eligible use during the tax period.
Any diesel refund amount which is found to have been incorrectly refunded will have to be paid back to SARS, together with any penalties and interest that are applicable.
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