Customs and Excise Highlights

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

16 Mar 2018 5 min read Tax and Exchange Control Alert Article

1     Amendments to Rules to the Customs & Excise Act, No 91 of 1964 (Act) (certain sections quoted from the SARS website):

1.1    Draft rules under s64E – Accreditation:

Section 64E of the Act allows the Commissioner to confer accredited client status on applicants who meet certain criteria. In return, the Commissioner confers benefits to reward the traders that meet the criteria. In 2011, the rules to s64E were amended to provide for a Level 2 Accreditation status. The proposed draft inserts two additional benefits to Level 2 Accreditation. The draft also includes amendments to the proforma agreement to make it applicable to Level 2 Accreditation.

1.2      Draft forms under rule 8 – reporting of conveyances and goods, as follows:

1.2.1     DA 8 – Sea cargo;

1.2.2     DA 8A – Air cargo;

1.2.3     DA 8B – Rail cargo; and

1.2.4     DA 8C – Road cargo.

1.3      Draft rules under s63 and s116 relating to stills and manufacture of excisable goods for own use, and to Schedule No. 8, as follows:

Draft rule amendments address the stills capacity that is allowed, records to be kept by still makers and importers, and obligations upon receipt of unmarked stills. Amendments to relevant items in Schedule No. 8 that relate to stills are also proposed and draft forms DA104 and DA105 are proposed.

New draft rules are proposed to regulate the manufacture of excisable goods solely for use by the manufacturer thereof. The updated draft form DA185 provides for the registration of such manufacturers of excise goods for own use.

Due date for comments is 20 March 2018.

2     Health Promotion Levy (certain sections quoted from the SARS website):

2.1    The Rule Amendment Notice and related forms, scheduled for publication in the Government Gazette, relate to the amendments to the Health Promotion Levy on Sugary Beverages, as follows:

2.1.1        DA 63 – Application for refund – Export for trade purposes of imported duty paid goods;

2.1.2        DA 64 – Application for drawback/refund;

2.1.3        DA 66 – General Application for drawback/refund;

2.1.4        DA 179 – Health Promotion Levy Return for Sugary Beverages; and

2.1.5        DA 185.482 – Licensing client type 4B2 – manufacturing warehouse.

2.2      The Tariff Amendment Notices, scheduled for publication in the Government Gazette, relate to amendments to:

2.2.1     Schedule 1 Part 7A to align it with the revised rules;

2.2.2     Schedule 4 Part 6 to amend General Note 3, as well as to delete Schedule 4 Part 7;

2.2.3     Schedule 5 Part 6, as follows:   Note 3 is amended to indicate that prescribed form must reflect the item applicable and the tax type code; and   Refund item 561.03 is inserted to provide for a refund instead of a rebate (ex499.02) from Schedule 4 to align with the DAS principles;

2.2.4     Schedule No. 5 as follows:   Note 8 is amended to include the reference to s54J in order to apply to the Health Promotion Levy; and   Note 3 in Schedule 5 Part 5 is amended as a consequence to the amendment of Schedule 5 Part 6; and

2.2.5     Schedule No. 6 Part 5, as follows:   Rebate item 690.01 has been amended to remove the reference to “(b) are being removed in bond” in line with DAS principles where no in-bond movements are allowed;   Rebate item 690.02 has been deleted as a rebate item and inserted as a refund item 691.05 to allow for HPL goods to be used in the manufacture of HPL or other goods where after a refund can be claimed on a DA 66;   Rebate item 691.02 has been amended to align with similar provisions for perishable goods to allow for reprocessing or destruction and also to add the necessary control measures such as customs supervision, documentary evidence, etc.; and   As a result of the amendment to rebate item 691.02, rebate item 691.03 has become redundant and will be deleted.

3     SARS issued a circular dated 2018/02/26 wherein external stakeholders were advised as follows (certain sections quoted from the circular):

3.1    SARS is on the verge of implementing the first phase of the Reporting of Conveyances and Goods (RCG) project which falls under the New Customs Acts Programme (NCAP).

3.2    The new Cargo Processing System (CPS) to be implemented under the RCG project reflects the new legislative framework in respect of cargo reporting, as set out in the Customs Control Act, 2014, and significantly improves cargo management and supply chain security.

3.3    In order to facilitate the transition to the new legal dispensation, a decision was taken to implement the first phase of RCG under the rules for s8 of the Act. Under RCG, it is mandatory for all cargo reporters in the air, sea, rail and road industries and involved in the movement of international cargo to submit reports to SARS electronically.

3.4    It has, in fact, been mandatory to submit electronic cargo reports to SARS since 2009, but this has not been strictly enforced in order to give industry the opportunity to develop the necessary capability to report electronically.

3.5    In order for the CPS system to function as intended, it is vital that all road, rail, sea and air cargo reports are submitted electronically, in full and in the correct format.

3.6    All land, sea and air cargo reporters are therefore urged to ensure compliance in terms of data submission in the correct format before the implementation of RCG, currently earmarked for 20 April 2018.

3.7    SARS has published specific Message Implementation Guides (MIGs) relating to the various conveyance and electronic cargo UN/EDIFACT messages to be submitted to SARS and held detailed technical discussions with software developers on system development requirements.

4     The International Trade Administration Commission has (certain sections quoted from the notice):

4.1    Received the following application concerning the Customs Tariff (notice dated 16 February 2018):

Increase in the rate of duty on phosphoric and polyphosphoric acids classifiable under tariff subheading 2809.20, from free of duty to 10 per cent ad valorem, by way of creating an additional 8-digit tariff subheading, which reads as follows: “Diphosphorus Pentaoxide; Phosphoric Acid; Polyphosphoric Acids, Whether Or Not Chemically Defined: Of a phosphorous content of 78 per cent or more”.

For enquiries contact: Mr C Sako, tel: (012) 394 3669, e-mail:, or Ms T Morale, tel: (012) 394 3694, e-mail:

Representations should be submitted to ITAC within four (4) weeks of the date of the notice.

5     The following notice was published in Government Gazette 41489 on Friday, 9 March 2018:

It is hereby notified that the amendments to the “Explanatory Notes to the Harmonised Commodity Description and Coding System” in accordance with Amending Supplement Nos 1 and 2 issued by the Customs Co-operation Council in Brussels shall, in terms of s47(8) of the Customs and Excise Act, 1964, become effective in the Republic on 9 March 2018.

6     Please advise if additional information is required.

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