23 July 2018 by Special Edition Tax and Exchange Control Alert

Customs & Excise Highlights

Herewith below selected highlights in the Customs & Excise environment since our last instalment.

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

1.1    Schedule 1 Part 1:

1.1.1   Substitution of tariff subheadings 1001.91 and 1001.99 as well as 1101.00.10 and 1101.00.90 to reduce the rate of customs duty on wheat and wheaten flour from 43,72c/kg and 65,59c/kg to 28,17c/kg and 42,26c/kg respectively; 

  1. SARS issued a circular dated 17 July 2018 wherein external stakeholders were advised as follows (certain sections quoted from the circular):

2.1    SARS implemented the first phase of its RCG project on 20 April 2018 in respect of the receipt and processing of the various supply chain cargo reports prescribed in the rules to s8 of the Act;

2.2    For those who would not be ready on the date of implementation, SARS allowed an additional 60-day period for development, testing and implementation until 1 August 2018, with the intention to enforce reporting compliance from that date;

2.3    SARS has decided to extend the grace period for reporting enforcement to 1 November 2018; and

2.4    All categories of cargo reporters, as well as their service providers, are urged to use this time to ensure that they become reporting compliant as SARS does not intend granting further extensions beyond this date.

  1. The Department of Agriculture, Forestry and Fisheries published notice number 368 of 2018 in the Government Gazette. It notifies of an application for the amendment of the wine export generic promotion statutory levy received from the wine industry, in terms of the Marketing of Agricultural Products Act, No 47
    of 1996.

The requested amendment is applicable to the export levy and it is proposed that the amendment be implemented from 1 January 2019
and lapse on 31 December 2021. 

Previously, the export levy was on bulk drinking and packaged drinking wine. The wine industry requested that these two categories be re-named into two new categories, namely certified and uncertified wine.

  1. National Treasury released the draft Taxation Laws Amendment Bill, 2018 (TLAB) and draft Tax Administration Laws Amendment Bill, 2018 (TALAB) on 16 July 2018. From a customs and excise point of view, the TLAB and TALAB include the following draft legislative amendments (which were announced in the 2018 Budget Review on 21 February 2018) (certain sections taken from the publications and/or memorandums):

4.1    The insertion of s58A into the Act was announced in the Budget Review 2018 to prevent “forestalling” in respect of excisable goods which was explained as “a practice through which abnormal volumes of products are moved from warehouses into the market to avoid increases in excise duty rates”. 

The proposed amendment inserts a new provision into the Act, aimed at combatting forestalling before an anticipated increase in the rate of excise duty and allowing the Commissioner to limit the quantities of excisable goods that may be entered for home consumption during a controlled period leading up to the anticipated increase.

Provision is made for the Commissioner to determine by rule the excisable goods to which the anti-forestalling measures apply, the controlled period before the increase during which the measures will apply, the quantities of goods that may be entered for home consumption during such period and the formula for calculating such quantities and penalties.

4.2    The insertion of s114A into the Act, which provides for the writing off or compromise of debt in terms of the Act, by making Chapter 14 of the Tax Administration Act, No 28 of 2011, applicable to such debt. The current s114A will become s114AA.

4.3    Proposed amendments making provision for the continuation of certain amendments of Schedules to the Act.

Written comments to be sent to Nombasa Langeni at: Nombasa.Langeni@treasury.gov.za and Adele Collins at:
  acollins@sars.gov.za by the close of business on 16 August 2018. 

  1. Please advise if additional information is required.
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