Diesel refunds in farming

How do I access the Diesel Refund Scheme?

The diesel refund is governed by the Customs and Excise Act, but is administered through the VAT system, which requires a person to be registered for VAT.

Qualifying entities that carry on eligible activities and that are registered for VAT purposes, may apply for registration for the diesel refund. Farming is a qualifying activity under the Diesel Refund Scheme and most farming enterprises will qualify to register for the Diesel Refund Scheme. The person carrying on a farming enterprise must apply for registration for the Diesel Refund Scheme.

If the person is already registered for VAT as a vendor that carries on a farming enterprise, then registration for the Diesel Refund Scheme can be made by completing and submitting a VAT 101D form

If the person carrying on a farming enterprise is not registered as a VAT vendor, then application for VAT registration and application for registration for the Diesel Refund Scheme must be made simultaneously. 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?

The diesel refunds under the Diesel Refund Scheme is processed using the VAT system.

The claim for a diesel refund will be made using the VAT 201 return. 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.

All relevant documentation relating to diesel purchases as well as the various logbook entries or other records which indicate the actual amounts of diesel drawn from stock for eligible and non-eligible use during the tax period must be retained for a period of 2 years.

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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