MCM Group supplies diesel-powered agricultural and mining equipment to farmers, smallholders and mining operations across South Africa — with branches in Cape Town, George, Gauteng, and Bloemfontein — and many of our customers in qualifying sectors are entitled to claim the SARS diesel rebate on eligible fuel consumption.

The on-land diesel rebate in South Africa allows businesses in the farming, forestry and mining sectors to reclaim the fuel levy and Road Accident Fund (RAF) levy paid on diesel consumed in eligible activities. It is not a general off-road or construction benefit — eligibility depends entirely on the qualifying activity defined under Schedule 6 to the Customs and Excise Act, as administered by SARS.

If you run diesel-heavy machines on a qualifying farm or mining operation — TLBs, excavators, or front-end loaders — this rebate can return thousands of Rands to your business each year, but only if you are registered correctly and keep the required records.

What is the Diesel Rebate in South Africa?

SARS administers the diesel refund system under Schedule 6 to the Customs and Excise Act. In essence, the fuel levy exists to fund road infrastructure. Because farmers, foresters and miners burn diesel for off-road primary production — not on public roads — SARS allows them to reclaim the road-related levy component.

Specifically, the refund covers two components of the diesel price: the general fuel levy and the Road Accident Fund (RAF) levy. Together these levies make up a significant portion of the pump price. Claiming the refund strips out the road-related tax from your qualifying diesel costs.

SARS updates levy rates with each national budget. As of 1 April 2026, the combined refund rate is R2.622 per litre (37.2 c/l fuel levy + 225.0 c/l RAF levy) under the temporary fuel-levy relief. Furthermore, qualifying users may now claim on 100% of eligible diesel, up from 80% previously. This temporary rate applies from 1 April to 5 May 2026, after which the permanent Schedule amounts return. Always check the SARS fuel levy page for current rates before calculating a claim.

Who Qualifies for the On-Land Diesel Rebate?

However, the on-land diesel refund is not a general off-road benefit. Instead, eligibility depends on the activity you carry out, which Note 6 to Schedule 6 of the Customs and Excise Act defines tightly. The three qualifying on-land sectors are:

Farming and agriculture: Diesel used in bona fide primary agricultural production — crop cultivation, livestock farming, on-farm irrigation, land clearing, dam construction and related activities — qualifies at the highest refund rate. This includes diesel consumed by tractors, water pumps, generators and equipment such as the MCM PTO-Driven Backhoe Digger used for farm earthworks or irrigation maintenance. The rebate applies whether you own or lease the farm, provided you carry out qualifying farming operations as defined in the Schedule.

Mining: Diesel consumed in qualifying mining operations and quarrying activities qualifies under the Schedule. This includes machines like the MCM 76X TLB and MCM 35DS Excavator when used in defined extraction activities within a mining operation. Importantly, the diesel must be consumed in the qualifying mining activity itself — not in transport or support services on the same site.

Forestry: Commercial forestry operations using diesel for timber harvesting, log extraction and related production activities qualify under a separate Schedule item. Equipment such as the MCM TCT30 Timber Crane Trailer would typically be used in this context.

VAT Registration Is a Prerequisite

To claim the diesel rebate, you must hold both a VAT registration with SARS and a diesel refund claimant registration. Note 6 to Schedule 6 defines a qualifying “user” as a VAT-registered person who has also completed the diesel-refund registration process. Owning qualifying equipment and operating off-road does not create entitlement on its own — you must complete both registrations before submitting any claim.

Who Does Not Qualify

General construction and civil contracting do not qualify as standalone on-land diesel rebate categories. A building contractor or civil engineering company operating excavators and TLBs on a construction site cannot claim the on-land diesel rebate simply because the machines are working off-road. The Schedule does not list ordinary construction as a qualifying activity.

The nuance matters: certain activities that look like construction — such as dam building, road construction or water infrastructure work — can qualify. However, they must form part of a qualifying farming or mining operation as defined in Note 6. A contractor hired to build a dam on a farm does not automatically inherit the farmer’s diesel rebate entitlement. SARS applies the qualifying activity test to the specific diesel use, not the type of machine or the off-road nature of the work.

Transport companies, courier services and businesses whose diesel use is primarily in on-road vehicles also fall outside the rebate. If your machine travels on a public road between sites, that road-use diesel does not qualify even if the machine itself is used for qualifying off-road work at the destination.

How Much Can You Claim Back?

Your diesel rebate amount depends on the current Schedule rate and the volume of qualifying diesel consumed. As of 1 April 2026, the combined refund rate for on-land qualifying users is R2.622 per litre, comprising the general fuel levy (37.2 c/l) and the RAF levy (225.0 c/l) under the temporary budget relief. This rate applies to 100% of your eligible diesel litres — up from 80% previously.

To illustrate: if a farmer runs an MCM 18X TLB for on-farm earthworks and land clearing, consuming approximately 500 litres per month, the monthly rebate at the current rate would be approximately R1 311 — or R15 732 per year. Scale that up with larger machines such as an MCM 75DS Excavator consuming 25 to 40 litres per hour on qualifying farm or mining work, and annual rebate claims can run into six figures.

In addition, note that rates change with each national budget. The R2.622/l figure reflects the temporary fuel-levy relief from 1 April 2026 and will revert to the permanent Schedule rate after 5 May 2026. Always verify the current rate on the SARS fuel levy page before calculating a claim.

How to Register for the Diesel Rebate with SARS

Before submitting any claims, register as a diesel refund claimant with SARS. SARS processes the diesel refund through the VAT system, so you must hold a valid VAT registration first. The steps below outline the full registration process.

1. Confirm VAT registration — Ensure your business is registered for VAT with SARS. The diesel refund system is linked to your VAT profile and cannot be processed without it.
2. Confirm qualifying activity — Verify that your business activities fall within farming, forestry or mining as defined in Note 6 to Schedule 6 of the Customs and Excise Act.
3. Submit a VAT101D — Complete the VAT101D (Application for Registration as a Diesel Refund User) and submit it to your local SARS branch. Include proof of qualifying activities, land ownership or lease agreements, and an equipment list with serial numbers. Having proper equipment invoices from MCM Group with engine and chassis numbers strengthens your application. For changes to an existing registration, use VAT102D.
4. Receive your diesel refund registration — Once approved, SARS links the diesel refund to your VAT profile. Claims are then submitted via your VAT return.

The registration process usually takes two to four weeks. Do not delay — register as soon as you acquire qualifying diesel-consuming equipment so that no eligible diesel is lost.

How to Submit Your Diesel Rebate Claim

Once registered, you submit diesel refund claims through your VAT201 return — specifically, the VAT201 includes a dedicated diesel refund section. SARS provides no separate stand-alone claim form; the system calculates your refund within the VAT return cycle.

Specifically, each claim period requires you to declare:

• Total litres of qualifying diesel consumed during the period, supported by purchase invoices and storage records
• Breakdown by qualifying activity (farming, forestry, mining) where you operate across more than one sector
• Opening and closing stock figures from your fuel storage records
• Equipment usage logs linking consumption to specific machines and qualifying activities

Submit claims within two years of the diesel purchase date — you forfeit the refund after that deadline. SARS pays approved refunds directly into your bank account, usually within four to eight weeks of SARS processing your VAT return. Always submit complete, accurate documentation — SARS delays or rejects incomplete claims.

Record-Keeping Requirements That SARS Demands

In practice, record keeping is where most diesel rebate claims fail. SARS has strict documentation requirements, and missing records can result in rejected claims or — worse — penalties after an audit.

Documents to Maintain for Every Claim Period

You must maintain these records for every claim period:

• Fuel purchase invoices — Original tax invoices from your diesel supplier showing litres purchased, price per litre, and VAT. Delivery notes from bulk fuel suppliers must include your name, address and the delivery location.
• Fuel storage records — Daily or weekly dipstick readings of your diesel tanks, showing opening stock, purchases received and closing stock. The difference between purchases and stock changes should closely match your claimed usage.
• Machine log books — Hour meter readings for each piece of equipment at the start and end of each claim period. If your MCM 30DS Excavator shows 200 operating hours over two months at approximately 12 litres per hour, SARS expects to see about 2 400 litres attributed to that machine.
• Activity records — A log of what work each machine performed, on which property or site, and during which dates. This demonstrates the diesel was used in qualifying farming, forestry or mining activities rather than general construction or transport.
• Equipment register — A complete list of diesel-consuming equipment including make, model, serial number, engine number and estimated fuel consumption. Buying from a reputable dealer like MCM Group ensures you receive proper documentation with every machine.

Furthermore, SARS requires you to keep these records for a minimum of five years. Keep both physical and digital copies — store them in a way that is accessible for audit at any time.

What Happens During a SARS Diesel Rebate Audit

Importantly, SARS audits diesel refund claims more frequently than many business owners expect. The customs division conducts both desk-based reviews and on-site inspections. Here is what a typical audit involves.

Desk audit: A SARS officer reviews your submitted claims against your VAT returns, fuel invoices and historical claim patterns. They check for inconsistencies — for example, if you claim more litres than your fuel supplier invoiced, or if your consumption suddenly doubles without a corresponding increase in qualifying activity.

On-site inspection: SARS may visit your farm or mining operation to verify that the equipment listed in your claims exists and is operational. They check hour meter readings against your log books, inspect fuel storage facilities and compare physical conditions with your paperwork.

Common audit triggers: Unusually high claims relative to the size of the qualifying operation, missing or incomplete records, significant increases between claim periods, and first-time claimants submitting large backdated claims. Businesses that maintain consistent, well-documented records rarely face adverse audit outcomes.

As a result, if SARS identifies discrepancies, they may disallow part or all of the claim and impose penalties of up to 200% of the disallowed amount. In serious cases involving fraudulent claims, SARS may pursue criminal prosecution. Proper record keeping is therefore not optional — it is your primary defence.

MCM Machines Used in Qualifying Diesel Rebate Activities

For reference, MCM Group supplies a range of diesel-powered machines commonly used in qualifying farming and mining operations. When used for defined qualifying activities, the diesel these machines consume is eligible for the rebate.

• MCM 76X TLB — Used on farms for dam construction, irrigation trenching and land clearing. Also used in qualifying mining operations. Estimated consumption of 8 to 12 litres per hour.
• MCM 13X TLB — A compact TLB suited to smallholdings and on-farm earthworks, burning approximately 4 to 6 litres per hour in qualifying activities.
• MCM 75DS Excavator — Suited to bulk earthworks on farms and qualifying mining operations, consuming 20 to 35 litres per hour depending on load.
• MCM 16DS Mini Excavator — Used for irrigation trenching and precision farm earthworks, using approximately 3 to 5 litres per hour.
• HZM 25G Front End Loader — Loading and stockpile management in qualifying mining and agricultural operations, typically burning 8 to 14 litres per hour.
• MCM PTO-Driven Backhoe Digger — Farm-specific implement for irrigation, drainage and on-farm earthworks under qualifying farming operations.

Notably, when you purchase equipment from MCM, you receive comprehensive documentation including engine numbers, serial numbers and detailed specifications — all essential for your SARS diesel rebate registration and ongoing claims.

Common Mistakes That Cost Businesses Their Diesel Rebate

Unfortunately, many South African businesses either fail to claim the diesel rebate at all or make errors that result in rejected claims or SARS penalties. Avoid these common pitfalls.

• Claiming for ordinary construction activities — General building or civil construction work does not qualify as a standalone on-land diesel rebate category. Only diesel used in qualifying farming, forestry or mining activities is eligible. Consult a tax practitioner before claiming if any of your activities are in or adjacent to construction.
• Not being VAT-registered before applying — The diesel rebate is processed through the VAT system. Without VAT registration, you cannot register as a diesel refund user or submit claims.
• Claiming road-use diesel — Diesel burned by machines or vehicles on public roads between sites does not qualify. Keep separate records for road versus qualifying off-road use.
• Missing the two-year deadline — Claims must be submitted within two years of the diesel purchase date. Letting invoices accumulate risks losing the refund entirely.
• Poor fuel storage records — Without dipstick readings or electronic tank monitoring data, SARS cannot verify your consumption figures and will likely disallow the claim.
• Buying fuel without proper tax invoices — Cash purchases from informal suppliers without a valid VAT invoice cannot be included in your claim. Always buy from registered fuel dealers who issue proper invoices.

Tips for Maximising Your Diesel Rebate

Overall, getting the most from the diesel refund system requires discipline and planning. In practice, these strategies help qualifying operators claim every Rand they are entitled to.

• Install a bulk fuel storage tank on your farm or at your operation with an electronic metering system. This gives you accurate delivery and consumption records that SARS will accept without question.
• Record hour meter readings on every machine at least weekly. A simple spreadsheet or mobile app is sufficient — as long as it is consistent and backed up.
• Submit claims with every VAT return — do not let them accumulate. The paperwork becomes harder to reconcile and you lose cash flow benefit.
• Work with a SAIT-registered tax practitioner experienced in diesel refund claims. Specialist help costs far less than a rejected claim or a SARS penalty.
• Maintain your equipment properly — a well-serviced MCM 20DS Mini Excavator runs more fuel-efficiently, keeping your consumption figures realistic and defensible. MCM’s parts department stocks genuine spares to keep machines running at peak efficiency.

Your Questions Answered

About the Author

Sources & References

Disclaimer: MCM Group is an equipment distributor, not a registered financial services provider or tax adviser. The information in this article is for general informational purposes only and does not constitute financial, tax or legal advice. Always consult a qualified accountant or SAIT-registered tax practitioner before registering for or submitting diesel rebate claims. SARS rules, rates and forms are subject to change.

• SARS — Fuel Levy and Road Accident Fund Levy
• SARS — Guide to Completing the VAT201 Return (diesel section)
• SARS — Find a Form (VAT101D and VAT102D)
• SAIT — South African Institute of Tax Professionals
• National Treasury — Budget Review 2025

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