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One should remember that there will be many documentary
requirements that should be met to satisfy Customs that importers
qualify for preferential rates of duty. Although supporting documents,
such as commercial invoices are not submitted in all instances the
importer must have a copy of the documents. Certificates of origin and
valid movements certificates in support of the origin and preferential
status of the goods – in the event of goods coming from a country which
South Africa has a free or preferential trade agreement in support
which allows the goods of that tariff subheading to be imported at a
lower rate of duty than goods coming from areas with which the country
does not have such an agreement must also be available in hard copy
format.
Developers of landed cost calculators must, as a minimum
requirement, be able to calculate the duty of the goods accurately.
Above the fact that the users of the software must be able to insert
the correct tariff classification, customs value and origin of the
goods, the duty calculator must be able to identify the different types
of duties, and the software must assist the user to calculate the
duties accurately.
How will your duty calculator deal with the calculation of all
types of customs and excise duties? Can it only do straight forward
duty calculations (such as ad
valorem calculations that are based on a percentage of the customs
value) or can it also do more complex calculations (such as composite
duty calculations in terms of which the ad valorem rate of duty has to be calculated)? As a
separate calculation, the specific rate of duty (for example amount of
duty per kilogram) has to be done for the same commodity. These types
of duty are separated by the word “or” and the higher of the two rates
of duty should be the applicable rate of duty. In this regard the
developer of the solution should have incorporated the capability of
the calculator to do this calculation and if the developer does not
know this, the duty and landed cost will be accurate.
Duty calculators should also be able to explain to the user
how to do the calculations. The General Notes to Schedule No. 1 explain
how to do these calculations.
Developers should also be aware of the definitions of the
different types of customs duty. They should be in a position to allow
their software to accurately link the different parts of the tariff to
one another, and to do all calculations separately.
Does your developer know that other duty and levies, in other
parts of Schedule No. 1 to the current South African Customs and Excise
Act, are to be calculated in addition to the duty in Schedule No.1?
Is the solution you are using able to identify goods
that are subject to provisional payments and not only anti-dumping
duties in Schedule No. 2? This information should also run in the
background and alert you to the fact that goods of that specific
subheading are subject to provisional payments in relation to
anti-dumping duties.
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In order to calculate the VAT and excise duties on commodities
accurately, the developer has to be aware of and incorporate all the
charges that should be included in the formulas for the calculation of
these charges. If these charges are not included, and if the other
rates of duty are calculated incorrectly, the VAT and excise duties
will also be calculated incorrectly.
Rebates, refunds and drawbacks on commodities are very
specific provisions that allow for goods to be imported at a lower rate
of duty provided the imported goods comply with certain provisions. Is
the duty calculator able to identify those conditions, and deduct the
rebates, refunds an drawbacks from the
prevailing rates of duty.
This is one of the most important features a duty calculator
must be able to have and do.
Landed cost calculators should be able to do much more than
these simple calculations. Developers should know what other charges
should be included in these calculations, and their software should be
able to ask for the right questions to do these calculations. Are the solutions you use able to do
this
THIRD BATCH OF DRAFT RULES TO THE CUSTOMS CONTROL ACT RELEASED
FOR COMMENTARY
(Comments due by 14 November 2014)
SARS Customs have published the third batch of draft Rules to
the Customs Control Act (Act 31 of 2014). The draft contains the draft
rules proposed under Chapter 21, Chapter 23 and Chapters 25 to Chapter
31.
Comments on
the Draft Rules are due on
14 November 2014.
With the exception of the draft Rules to
Chapter 22, dealing with international postal articles handled by the
South African Post Office, the draft rules of the first 31 Chapters of
the Customs Control Act have now been published. The draft Rules for
Chapters 32 to Chapter 41 are still outstanding. Download the Jacobsens
Customs News Bulletin of 16 October 2014 for more information.
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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.
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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.
ANTI-DUMPING DUTY INVESTIGATIONS
There were no applications to amend the Customs Tariff of the
Southern African Customs Union (SACU) at time of publication.
The last application that was published related to the
initiation of a sunset review investigation of anti-dumping duty on
stainless steel sinks originating in or imported from China and
Malaysia (anti-dumping
duties 215.02/7324.10/01.06(65) to 215.02/7324.10/05.06(64)).
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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.
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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 the time of publication.
The last tariff amendments dealt with the increase in the
general rate of customs duty on wheat and wheaten flour, classifiable
with tariff subheadings 1001.91, 1001.99, 1101.00.10 and 1101.00.90;
and
An increase in the general rate of customs duty on certain
products of paper or paperboard, coated, impregnated or covered with
plastic or metal foil from free to 5%.
Download the
latest Customs Watch to have access to
the latest tariff amendments which were published on
10 October 2014 and sent out under cover of
Supplement 1038.
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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.
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There
were no Rule amendments at time of publication. The last amendment
(DAR/140) was published on the
8 August 2014.
The
last Rule amendment set a limitation of R50 000 on cheque payments in
Rule 120.12.
Download the latest Customs Watch to
have access to the latest tariff and rule amendments.
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