By Altaaf Motala, Partner, PKF Durban

SARS has launched a modernised Diesel Refund System to simplify claims, strengthen compliance, and reduce disputes. Diesel refunds will become a stand-alone Customs & Excise process, not a VAT offset.

Note 6 to Part 3 of Schedule 6 of the Customs and Excise Act No. 91 of 1964 (“The Customs Act”), currently allows for diesel users in the farming, forestry, and mining sectors to claim refunds on 80% of eligible diesel purchases and usage.

Effective from 1 April 2026 this legislation has been amended for primary sector claimants operating on land who will be entitled to claim a refund on 100% of eligible diesel used in qualifying farming, forestry, and mining activities. This amendment streamlines the administration of the Diesel Refund Scheme. To ease the transition, the new rate of 100%, which is effectively applied from the April 2026 return, will reflect only from the calendar month when this VAT return must be submitted, i.e. May 2026.

Key take aways:

• Refunds will now be processed separately from VAT
• Diesel sellers and qualifying users must register on the new SARS e-filing platform
• Claims submitted digitally will be subject to automated checks
• Real‑time status updates will be available

Key Actions Required:

• Register on the new e-filing platform in April 2026
• Keep accurate records log to ensure compliance

This modernisation is designed to give you a faster, more transparent, and compliant refund process. For ease of understanding the new system below are highlights applicable to the new system and how it affects the old system.

Impact on VAT returns:

• Your VAT return will no longer include diesel refund claim fields.
• Diesel refund audits take place independently on the new platform.
• Cash flow management becomes more predictable since the two processes are no longer intertwined.
• Potential reduction in delays of VAT refunds
• VAT returns will still reflect the applicable claim period, but they will not process the diesel refund.