Customs News Bulletin

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7 January 2015

Latest Amendments and News

 

 

COMPULSORY TARIFF DETERMINATIONS ON ALCOHOLIC BEVERAGES

Clause 15 in the Tax Administration Laws Amendment Bill, B14 of 2014 imposes compulsory tariff determinations for alcoholic beverages. Draft rules have been published on the SARS website to give effect to the amendment by proposing amendments to section 47(9)(a)(iv) and the Rules thereto and provide clarity on the phasing in thereof.

In terms of the draft rule:

The amendment will take effect on 1 April 2015 – and it is no April fool’s joke.

In accordance with section 47(9)(a)(iv)(ee) any alcoholic beverage that will be imported for the first time, or newly manufactured, on or after 1 April 2015 must be submitted for tariff classification through the office of the Controller at the place where the beverage is imported or manufactured before application of the procedures respectively specified in items (A) and (B) of that section.

In accordance with section 47(9)(a)(iv)(ff)(A) the order and periods for submissions of applications for tariff determinations in respect of the classes of all kinds of alcoholic  shall be:

  • Alcoholic beverages for which no tariff determination was issued prior to 1 April 2015.

  • Subheading 2208.90: 1 April 2015 to 30 September 2015.

  • Other fermented beverages (subheading 2206.00.90): 1 October 2015 to 31 March 2016.

  • Liqueurs and cordials (subheading 2208.70) and other fermented alcoholic beverages (subheadings 2206.00.83, 2208.00.84 and 2206.00.87): 1 April 2016 to 30 September 2016.

  • Beer made from malt (subheading 2203.00.90) and cider, perry and mead (subheading 2206.00.81, 2206.00.82 and 2206.00.85): 1 October 2016 to 31 March 2017.

  • All other classes or kinds of alcoholic beverages not mentioned above: 1 April 2017 to 31 March 2018.

  • Alcoholic beverages for which a tariff determination was issued 24 months or more prior to 1 April 2015, after a period of 36 months (1 April 2018) but not later than 31 March 2019.

  • Alcoholic beverages for which a tariff determination was issued within 24 months prior to 1 April 2015: 1 April 2019 to 31 March 2020.

It should be noted that no new tariff determination application in respect of any existing determination is required for any change in the alcoholic strength of beverages classified under any subheading of heading 22.04 or 22.05, provided the alcoholic strength remains within the range specified in the subheading  of the existing tariff determination.

For more information download the draft notice at http://www.sars.gov.za/AllDocs/LegalDoclib/Drafts/LAPD-LPrep-Draft-2014-88%20-%20Draft%20Rules%20for%20section%2047%20New%20rules%20for%20alcoholic%20beverages.pdf

 

We wish our readers a prosperous 2015.

 

 

 

Customs Tariff Applications and Outstanding Tariff Amendments

 

 

 

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.

The International Trade Administration Commission (ITAC) published a notice regarding several applications concerning amendments to the Customs Tariff for South Africa and Botswana, Lesotho, Namibia and Swaziland. 

Comments are due by 23 January 2015.

The first application relates to an increase in the general rate of customs duty on zinc-coated/galvanized steel, aluminium-zinc coated steel and paint-coated steel, classifiable under tariff subheadings 7210.41, 7210.49, 7212.30, 7210.61, 7210.90, 7225.99, 7210.70 and 7212.40 from free of duty to 10% ad valorem.  (ITAC Reference 05/2014. Enquiries: Ms Ramphabana and/or Mr N. Mahlalela. Telephone: (012) 394 3627, (012) 394 3684. E-mail: nramphabana@itac.org.za and/or nmahlalela@itac.org.za.

The second application relates to the reduction in the general rate of customs duty on primary cells/batteries, cylindrical (excluding those of a height not exceeding 7mm), of a diameter exceeding 19mm , classifiable under tariff subheading 8506.50.25, from 10% ad valorem to free.  (ITAC Reference 07/2014. Enquiries and correspondence to be directed to Ms M Moloto. Telephone: (012) 394 3676. Fax: (012) 394 4676. Email: mmoloto@itac.org.za. Download the notice (Government Notice No. R. 1155 of 2014)  http://www.gov.za/sites/www.gov.za/files/38319_gen1155.pdf

 

 

 

 

Customs Tariff Amendments

 

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 since the  amendments that were released on 22 December 2014.

Download the latest Customs Watch to have access to the latest tariff amendments.

 

 

 

Customs 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. 

There were no rule amendments at time of publication. The last amendment (DAR/140) was published on 8 August 2014. Government Notice No. R.600 was published in the Government Gazette 37890 of 8 August 2014.

Download the latest Customs Watch to have access to the latest tariff and rule amendments.

 

 

 

 

 

 

 

 

 

Contact Information:

Mayuri Govender

Jacobsens Editor

Tel: 031-268 3273
e-mail: 
jacobsen@lexisnexis.co.za

 

 

Contact the Author:

Leon Marais 
GMLS Associate: Customs Specialist
Tel: 053-2030727

e-mail: leon.marais@intekom.co.za/leon@gmls.co.za