Customs News Bulletin

From time to time certain government departments publish draft legislation to inform stakeholders about their intention to amend legislation, and to invite comments. The commentary period ranges from 2 week to longer periods, depending on the urgency of the matter.

The Bulletin focuses on the publication of information relating to such matters which impact on Customs and Excise legislation and on broader import and export legislation.

DRAFT CUSTOMS LEGISLATION FOR PUBLIC COMMENT

Proposed new rebate item for duty free goods imported for exploration for or production of petroleum (Comments due by 30 September 2013)

Draft Notices were recently published on the SARS website relating to a proposed new rebate item for duty free goods imported for exploration for or production of petroleum.

Utilisation of the rebate item will be subject to production of a rebate permit from ITAC.  Draft Notes to the rebate item (460.23) with regard to the ITAC permit have also been published.

Many Schedule No 4 rebate provisions are exempted from payment of VAT under Schedule No 1 to the VAT Act, 89 of 1991.  A draft notice to exempt goods imported under paragraph 8 of Schedule No 1 to the VAT Act has also been published.

The proposed amendments: -

1.     makes a distinction between imported goods that are duty free and not subject to an ITAC permit and those that attract duty but are subject to an ITAC permit;

2.     allows for the temporary imports provided the conditions stipulated in the item notes are complied with;

3.      provide for exemption from VAT on the goods imported solely for use in petroleum exploration; and

4.      are intended for implementation with effect from 1 January 2014.

   View the SARS Draft Amendment website for more information on draft documents that have been published

   recently.

PROPOSED REGULATIONS TO PHASE-OUT THE USE OF POLYCHLORINATED BIPHENYLS (PCB) AND POLYCHLORINATED BIPHENYL (PCB) CONTAMINATED MATERIAL

Draft regulations were published under the National Environmental Management Act to phase out the use of polychlorinated biphenyls (PCB) and polychlorinated biphenyl contaminated materials by 2023.

In the Government Notice members of the public were invited to submit written representations or objections on the proposed regulations within 60 days of publication of the notice.

The proposed regulations contain prohibitions on the use, importation and sale of PCB materials and PCB contaminated materials.  Importers, exporters and manufacturers of PCB materials and PCB contaminated materials are encouraged to download the draft regulations in order to determine how the prohibitions will affect their businesses.

Some of the products that could be affected by these regulations are:

• Waste oils containing PCBs, polychlorinated terphenyls (PCTs) or polybrominated biphenyls (PBBs) (subheading 2710.91); and

• Chemical compounds containing PCBs, PCTs or PBBs.

The proposed regulations to phase-out the use of PCB materials and PCB contaminated materials were published in Government Gazette Notice No. 36749 of 15 August 2013 under Notice 849 of 2013. Members of the public and interested parties are invited to submit written representations and objections to the Department of Water and Environmental Affairs by 16 October 2013.

Download the draft regulations for more information.

Notice 860 of 2013; List 14/2013

The International Trade Administration Commission (ITAC) is responsible for tariff investigations, amendments, and trade remedies in South Africa and on behalf of SACU.

Tariff investigations include:

Increases in the customs duty rates in Schedule 
No. 1 Part 1 of Jacobsens. These applications apply to all the SACU Countries, and, if amended, thus have the potential to affect the import duty rates in Botswana, Lesotho, Namibia, Swaziland and South Africa.

Reductions in the customs duty rates in Schedule No. 1 Part 1. These applications apply to all the SACU Countries, and, if amended, thus have the potential to affect the import duty rates in Botswana, Lesotho, Namibia, Swaziland and South Africa.

Rebates of duty on products, available in the Southern African Customs Union (SACU), for use in the manufacture of goods, as published in Schedule No. 3 Part 1, and in Schedule No. 4 of Jacobsens. Schedule No. 3 Part 1 and Schedule No. 4 are identical in all the SACU Countries.

Rebates of duty on inputs used in the manufacture of goods for export, as published in Schedule No. 3 Part 2 and in item 470.00. These provisions apply to all the SACU Countries.

Refunds of duties and drawbacks of duties as provided for in Schedule No 5. These provisions are identical in the all the SACU Countries.

Trade remedies include:

Anti-dumping duties (in Schedule No. 2 Part 1 of Jacobsens), countervailing duties to counteract subsidisation in foreign countries (in Schedule No. 2 Part 2), and safeguard duties (Schedule No. 2 Part 3), which are imposed as measures when a surge of imports is threatening to overwhelm a domestic producer, in accordance with domestic law and regulations and consistent with WTO rules.

Dumping is defined as a situation where imported goods are being sold at prices lower than in the country of origin, and also causing financial injury to domestic producers of such goods. In other words there should be a demonstrated causal link between the dumping and the injury experienced. To remedy such unfair pricing, ITAC may, at times, recommend the imposition of substantial duties on imports or duties that are equivalent to the dumping margin (or to the margin of injury, if this margin is lower).

Countervailing investigations are conducted to determine whether to impose countervailing duties to protect a domestic industry against the unfair trade practice of proven subsidised imports from foreign competitors that cause material injury to a domestic producer.

Safeguard measures, can be introduced to protect a domestic industry against unforeseen and overwhelming foreign competition and not necessarily against unfair trade, like the previous two instruments. In the WTO system, a member may take a safeguard action, which is, restricting imports temporarily in the face of a sustained increase in imports that is causing serious injury to the domestic producer of like products. Safeguard measures are universally applied to all countries, unlike anti-dumping and countervailing duties that are aimed at a specific firm or country.

Schedule No. 2 is identical in all the SACU Countries.

ITAC has received the following applications concerning amendments to the Customs Tariff of the Southern African Customs Union (SACU).  These applications related to:

1.       Increase in the rate of Customs Duty on coated fine paper

Coated fine paper is classifiable under various subheadings of heading No 48.10, which includes 4810.13.20, 4810.13.90, 4810.14.10, 4810.14.90, 4810.19.90 and 4810.20.90.

ITAC has received an application from Nampak for an increase in the rate of duty on coated fine paper of these subheadings from free to the bound WTO rate of 5% ad valorem.  

Enquiries: Manini Masithela, telephone (012)  394 3682, fax (012) 394 4682 or e-mailmmasithela@itac.org.za and / or Lebogang Loate, telephone (012) 394 3629, fax (012) 394 4629 or e-mail lloate@itac.org.za.

Representations should be submitted by 20 September 2013.

2.       Increase in the rate of Customs duty on roasted chicory

Roasted chicory is classifiable in tariff subheading 2101.30.10.

ITAC has received an application for Chicory SA for an increase in the rate of customs duty on roasted chicory from 9,2c/kg to 37% ad valorem.

ITAC Ref 17/2013, Enquiries Ms. Barbara Moeng, Tel.: (012) 394 3623, fax: (012) 394 3623, or e-mailbmoeng@itac.org.za.

Representations should be submitted by 20 September 2013.

3.       Increase in the general rate of Customs Duty on heat exchange units

Heat exchange units are classifiable under tariff subheading 8419.40.

ITAC has received an application from GEA Aircooled Systems for an increase in the rate of duty on heat exchange units from free to the WTO bound rate of 15% ad valorem.

 ITAC Ref 47/2012, Enquiries Mr. N Mahlalela, Tel.: (012) 394 3684 or e-mail nmahlalela@itac.org.za.

Representations should be submitted by 20 September 2013.

4.       Creation of rebate provisions for concentrated cranberry and passion fruit juices, not containing added sugar or other sweetening matter of a Brix value exceeding 45 for use in the manufacture of mixtures of fruit juices

Cranberry juices and passion fruit juice, both concentrated and not containing added sugar or other sweetening matter, of a Brix value exceeding 45, fall in subheadings 2009.81.10 and 2009.89.40 respectively.

ITAC has received an application from Ceres Fruit Juices (Pty) Ltd for rebate facilities to be created for these juices for use in the manufacture of fruit juices in tariff subheading 2009.90.10

Currently the cranberry and fruit juices of subheading numbers 2009.81.10 and 2009.89.40 are subject to general and EFTA ad valorem rates of 20%.

 ITAC Ref 13/2013, Enquiries Khosi Mzinjana, Tel.: (012) 394 366, fax (012) 394 4664 or e-mailkmzinjana@itac.org.za.

Representations should be submitted by 20 September 2013.

5.       Reduction of the Customs Duty on poly vinyl butyral

Tariff subheading 3920.91 covers poly vinyl butyral.

ITAC has received an application from National Auto Glass (Pty) Ltd for a reduction in the rate of duty on poly vinyl butyral from 10% ad valorem to free.

ITAC Ref 05/2012, Enquiries Sipho Tsabalala, Tel.: (012) 394 3739 or e-mail stsabalalala@itac.org.za or Chris Sako, tel.: (012) 394 3669  or e-mail csako@itac.org.za.

Representations should be submitted by 20 September 2013.

6.       Amendment of Tariff subheadings 8302.30.30, 8302.41.10 and 8302.42.10

The tariff subheadings above cover:

“- - Fittings of iron, steel or copper, commonly used in the manufacture of windows, doors and door frames (excluding window opening mechanisms), of base metal”

“- - - Fittings of iron, steel or copper, commonly used in the manufacture of windows, doors and door frames”; and

“- - - Fittings of iron, steel or copper, commonly used in the manufacture of doors and door frames”

ITAC has received an application from SARS that the wording of the three subheadings be amended as follows:

“8302.30.30 - - Fittings of iron, steel or copper, commonly used in the manufacture of windows(excluding window opening mechanisms), doors and door frames (excluding window opening mechanisms), of base metal”

“8302.41.10 - - - Fittings of iron, steel or copper, commonlyof a kind used solely or principally for in the manufacture of windows, doors and door frames of base metal”; and

“8302.42.10 - - - Fittings of iron, steel or copper, commonlyof a kind used solely or principally for in the manufacture of doors and door frames of base metal.”

The current descriptions are misleading and lead to tariff classification issues which have not been foreseen when the original 8-digit subheadings were created.

This amendment is proposed in order to reduce the possible incorrect interpretations that could lead to costly and unnecessary litigation when disputes arise. 

ITAC Ref 18/2013, Enquiries Mr. N Mahlalela, Tel.: (012) 394 3684 or e-mail nmahlalela@itac.org.za.

Download Notice 860 of 2013 for more information on the reasons for these applications.

Representations should be submitted by 20 September 2013.

The applications were published under LIST 14/2013 in Notice No. 860 OF 2013 which was published in Government Gazette No. 36760 OF 23 August 2013.

Customs Tariff Application List 13/2013 was published underNotice 745 of 2013 in Government Gazette 36666 of 19 July 2013.

With the exception of certain parts of Schedule 
No. 1, such as Schedule No. 1 Part 2 (excise duties), Schedule No. 1 Part 3 (environmental levies) Schedule No. 1 Part 5 (fuel and road accident fund levies), the other parts of the tariff is amended by SARS based on recommendations made by ITAC resulting from the investigations relating to Customs Tariff Applications received by them. The ITAC then investigates and makes recommendations to the Minister of Trade and Industry, who requests the Minister of Finance to amend the Tariff in line with the ITAC’s recommendations. SARS is responsible for drafting the notices to amend the tariff, as well as for arranging for the publication of the notices in Government Gazettes.

During the annual budget speech by the Minister of Finance in February, it was determined that parts of the tariff that are not amended resulting from ITAC recommendations, must be amended through proposals that are tabled by the Minister of Finance.

Once a year big tariff amendments are published by SARS, which is in line with the commitments of South Africa and SACU under international trade agreements.

Under these amendments, which are either published in November or early in December, the import duties on goods are reduced under South Africa’s international trade commitments under existing trade agreements.

There were no tariff amendments at time of publication.

The following amendments will be sent to Jacobsens subscribers under cover of Supplement 1024: 

·         Additional Note 1(f) to Chapter 27 has been amended by amending the distillation specifications for illuminating kerosene.

The tariff amendment above was published in Government Gazette No. 36780 of 30 August 2013 under Notice number R. 640.

The Jacobsens reference number for this amendment will be A1/1/1474.

On 5 July 2013 provisional payments were imposed in relation to safeguard duties on frozen potato chips or French fries up to and including 20 January 2014 as recommended in ITAC Report No. 436.

A correction notice was published on 6 September 2013 in Government Gazette No. 36824 to amend the subheading in that notice to subheading no. 2004.10.20.

The correction notice was published under Notice No. R 667.

Subscribe to the Jacobsens Customs Watch or download the latest Customs Watch to have access to the latest tariff and rule amendments.

The Customs and Excise Act is amended by the Minister of Finance. Certain provisions of the Act are supported by Customs and Excise Rules, which are prescribed by the Commission of SARS. These provisions are numbered in accordance with the sections of the Act. The rules are more user-friendly than the Act, and help to define provisions which would otherwise be unclear and difficult to interpret.

Forms are also prescribed by rule, and are published in the Schedule to the Rules.

​Rule 19A3.03 was amended to prescribe the removal of stripped wine (fermented ethyl alcohol) from customs and excise manufacturing warehouses for wine products (SVM) to secondary customs and excise manufacturing warehouses for spirits products (VMS)

This amendment was published in Government Notice Gazette No. 36780 of 30 August 2013 under Notice No. R. 639. The SARS reference number for this amendment is DAR 125.

Download the amendments to view the notices.