12 May 2017 by Tax and Exchange Control Alert

Customs and Excise Highlights

This week’s selected highlights in the Customs and Excise environment since our last instalment.

1. The official launch of the South African Revenue Service’s Customs Preferred Trader Programme occurred on 8 May 2017. This journey began in 2011 and was set up under the World Trade Organisation’s internationally recognised Authorised Economic Operator programme.  

Generally, the Preferred Trader Programme is aimed to be a relationship between a Customs client and SARS Customs in order to:

  • Achieve benefits for both parties;
  • Stamp out misconduct and fraudulent activities;
  • Obtain and maintain a high level of compliance; and
  • Promote legitimate trade facilitation.

Some of the benefits to trade should include:

  • The appointment of a Customs Relationship Manager tasked with facilitating the relationship between the client and Customs;
  • Reduction of the amount of security required for compliance with a Customs procedure;
  • Fewer routine documentary and physical inspections;
  • Prioritising a request for tariff and valuation determinations; and
  • Prioritising access to non-intrusive inspection techniques when goods are stopped or detained for inspection.

A specialised Preferred Trader team has been set up by SARS to handle applications and audits, while an Accreditation Review Customs Committee at SARS’s head office makes a final decision on all accreditation submissions. All importers and exporters may apply for Preferred Trader status if they meet certain compliance criteria. 

For more information, interested parties can email preferredtrader@sars.gov.za or go to the SARS website: www.sars.gov.za

Note, however, that SARS will likely conduct a thorough audit on applicants and the risk of potential discovery of (inadvertent) contraventions of the Customs & Excise Act, No 91 of 1964 (Act) and subsequent retrospective demands in duties, VAT, penalties, interest and so on, is prevalent. 

2. Draft technical amendments to Schedule 1, 2 and 6 to the Act. We quote from the SARS media release:

The draft amendments in Parts 1, 2A and 3E of Schedule No. 1, Part 1 of Schedule No. 2 as well as Part 1C of Schedule No. 6 to the Customs and Excise Act, 1964 (the Act), are technical in nature and will have no effect on the duty structure.

The amendments are mostly due to requests received from industry or other government agencies but there are also some consequential amendments to the HS 2017 that were omitted from the Publication for 1 January 2017 that is now rectified.

These relate to:

2.1  Schedule 1 Part 1:

2.1.1 Mixed portions of bone in cuts of chicken under tariff subheading 0207.14.9;

2.1.2 Primary products that are made from virgin material as opposed to recycled material for plastics classifiable in Chapter 39;

2.1.3 Aluminium waste and scrap of heading 76.02;

2.1.4 The creation of separate tariff subheadings for substances that contribute to the depletion of the ozone layer and global warming, of Chapters 29 and 38;

2.1.5 The creation of 8-digit tariff subheadings for screw studding classifiable in heading 73.18; and

2.1.6 Providing for road wheels and rims fitted with tyres separately under certain categories for parts included in Part 3E for Chapter 87.

2.2  Schedule 1P2A: Heading 2206.00 amended to include saké; 

2.3  Schedule 1P3A: Providing for road wheels and rims fitted with tyres separately under certain categories;

2.4  Schedule 2: Anti-dumping item 201.02/0207.14.92/01.08 is inserted as a consequence to the insertion of 8-digit tariff subheading for mixed portions in Part 1 of Schedule No. 1; and

2.5  Schedule 6: With the implementation of HS 2017 provisions were inserted for wine in containers holding more than 2 litres but not more than 10 litres.

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