The Drain Surgeon / D Eichhorn / 15124
Ruling of the : ASA Directorate
In the matter between:
Mr David Eichhorn	Complainant(s)/Appellant(s)
Plan Two Plumbing (Pty) Ltd t/a The Drain Surgeon	Respondent

08 Mar 2010

Mr Eichhorn lodged a consumer complaint against advertising for The Drain Surgeon.

The advertising states, inter alia, the following:

“BLOCKED
DRAIN
SPECIAL
R370,00
Excl. vat…”

COMPLAINT
In essence, the complainant submitted that the advertisement quotes a price without VAT and that this is not clearly communicated.

RELEVANT CLAUSE OF THE CODE OF ADVERTISING PRACTICE
In light of the complaint Clause 19 of Section II was taken into account.

RESPONSE
The respondent submitted that it was not its intention to mislead the public. Excluding VAT is presented on the sign board below the price, due to size constraints on the boards certain messages had to be prioritised.

ASA DIRECTORATE RULING
The ASA Directorate considered all the relevant documentation submitted by the respective parties.

The complainant submitted that the respondent advertises prices for its goods without including the VAT amount.

The respondent submitted that the advertising specifically quoted a price and stated that it excluded VAT.

Clause 19 of Section II states that when any indication of costs is given in an advertisement regard to should be had for, inter alia, the provisions of Section 64 and 65 of the value-added Tax Act 89 of 1991.

The Directorate considered a similar matter in Planet Fitness / P Nganwa and others (24 August 2004), the Directorate received an opinion from the South African Revenue Services confirming the provisions of section 65 of the Value Added Tax Act. In terms thereof it is unacceptable to advertise a price “excluding vat” without indicating the amount of vat and the total price including vat.

This was again affirmed in Telkom ADSL / J Joseph and others / 1787-1790 (21 January 2005.)

The respondent’s advertising appears to be in contravention of Section 64 of the Value Added Tax 89 of 1991, as the advertisement prominently lists a price excluding VAT and in a minute font there is a disclaimer stating that vat is excluded.

Accordingly, the advertising is in contravention of Clause 19.4 of Section II of the Code.

Given the above finding, the advertising:

• Must be withdrawn;
  
  
• The process to withdraw the advertising must be actioned with immediate effect on receipt of ruling;
  
  
• The withdrawal of the advertising must be completed within the deadlines stipulated by Clause 15.3 of the Procedural Guide; and
  
  
• The advertising may not be used again in its current format.

The complaint is upheld.