19 September 2019 by Tax & Exchange Control Alert

Customs & Excise Highlights

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

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

  1. The insertion of draft rule 107A aims to ensure control of the supply chain in the tobacco industry. The rule provides requirements in respect of tobacco leaf threshers. Tobacco leaf threshers are required to register their factories with the Commissioner and keep records for purposes of inspection by the Commissioner.

The following forms are included in the draft:

  • DA 185; and
  • DA 185.4A17.

Due date for comments is 27 September 2019 and may be sent to C&E_legislativecomments@sars.gov.za.

  1. Regarding the environmental levy in respect of carbon tax imposed in terms of the Carbon Tax Act, No 15 of 2019 (Carbon Tax Act), the following was published:

2.1     DA 185 – Application form: Registration / licensing of customs and excise clients;

2.2     DA 185.4B2 – Licensing Client Type 4B2: Manufacturing Warehouse;

2.3     DA 180 – Environmental Levy Return for Carbon Tax;

2.4     DA180.01A.1 – Fuel combustion stationary source;

2.5     DA180.01A.2 – Fuel combustion non-stationary source;

2.6     DA 180.01B1 – Fugitive (Oil and natural gas);

2.7     DA 180.01B2 – Fugitive (Coal Mining and Handling);

2.8     DA 180.01C – Industrial process source;

2.9     DA 180.02 – Allowances;

2.10   Completion notes to form DA 180 and annexures; and

2.11   Comment sheet.

Explanatory Note: Draft rules have been inserted for implementation of the carbon tax, to provide details on the envisaged carbon tax administration, including the registration of clients, licensing of emissions facilities, carbon tax environmental levy accounting and application of allowances as rebates, all of which need to be synchronised with the essential systems development.

The secondary carbon tax legislation will therefore be concluded before the obligations of taxpayers will arise in respect of licensing in early 2020 and submission of accounts and payments in July 2020. The effective date of this legislation will nonetheless be applied retrospectively to 1 June 2019 when the carbon tax took effect.

Comments can be submitted to C&E_legislativecomments@sars.gov.za, which are due on 11 October 2019.

  1. Amendment to rules 49A.01, 49B.10(9)1 and 49B.10(9)9 in relation to preferential tariff treatment of goods.

Amendments to Schedules to the Act (certain sections quoted from the SARS website):

  1. Regarding the environmental levy in respect of carbon tax imposed in terms of the Carbon Tax Act:

1.1     Draft amendment to Part 1 of Schedule No. 1 – in order to insert the provision of carbon emissions tax;

1.2     Draft amendment to Part 3F of Schedule No. 1 – to provide for the environmental levy on carbon emissions; and

1.3     Draft amendment to Part 6 of Schedule No. 6 – to provide for rebates and refunds on carbon tax.

Comments can be submitted to technicaltariff@sars.gov.za, which are due on 11 October 2019.

  1. The amendment of General Note G to Schedule 1 to insert the abbreviation and symbol “CO²e” to mean CO² equivalent. The abbreviation of “t” as currently contained in General Note G is expanded to read as ton/tonne. The tonne is amended to align with the wording within the Carbon Tax Act.

  2. The following amendments to Schedule 1 Part 1:

3.1     Fish classifiable in tariff subheadings 0302.13, 0302.14, 0303.14 and 0305.41, in Section A, Annex II, listed as staging category “B*” is reduced to a preference margin of 17% of the most favoured nation (MFN) rate of duty;

3.2     Fish in Chapters 3 and 16, in Section A, Annex II, listed as staging category “C*” is reduced to a preference margin of 50% of the MFN rate of duty;

3.3     Requests from the South African Pecan Nut Producers Association for the creation of separate tariff subheadings to provide for Pecan Nuts classified in tariff subheading 0802.90;

3.4     Requests from the Western Cape Tourism, Trade and Investment Promotion Agency for the creation of separate tariff subheadings for Rooibos tea classifiable in tariff subheading 1212.99;

3.5     Request from PG Bison (Pty) Ltd for the creation of new tariff subheadings for particleboard, medium density fibreboard and surface-decorated paper classifiable in tariff subheadings 4410.11, 4411.12, 4411.13 and 4811.59;

3.6     Request from the South African Footwear and Leather Industries Association for the creation of separate tariff subheadings for footwear classifiable in Chapter 64; and

3.7     Request from the Southern African Customs Union for the creation of 8-digit tariff subheadings classifiable under tariff subheadings 7104.20 and 7104.90 to differentiate between rough or synthetic diamonds and other synthetic gemstones.

  1. The following amendments to Schedule 4:

4.1     Note 5 in Schedule 4 is being amended to substitute the reference to form DA 331 which was replaced with form TC-01 as published in Government Gazette No. 35259 dated 20 April 2012. Form TC-01 is a traveller card used by travellers at ports of entry to declare personal and household effects; and

4.2     As a consequence of the merging of departments, rebate items 409.00, 460.01/03.04/01.04, 460.01/04.00/01.02, 460.01/04.09/01.04, 460.02/00.00/01.00, 460.02/1001.9/0105, 460.02/12.05/01.04, 460.03/0207.14.9/01.07 and 460.25 are being amended to change the name of a government department from the Department of Agriculture, Forestry and Fisheries to Department of Agriculture, Land Reform and Rural Development.

  1. In Schedule 5, provisions relating to the Motor Industry Development Programme (MIDP) were replaced with the Automotive Production and Development Programme (APDP) that came into effect on 1 January 2013. The provisions of MIDP were in place from 2005 up to and including 31 December 2012. Refund items 537.00 and 537.02/87.00/01.02 are being deleted, as they were applicable to MIDP.
  2. The following amendments to Schedule 6:

6.1     Note (l)(iii) in Part 3 of Schedule 6 is being amended to change the name of a government department from the Department of Mineral and Energy Affairs to the Department of Mineral Resources and Energy; and

6.2     Rebate items 672.01, 672.01/105.10/01.01 and 672.01/105.10/02.01 are being deleted as they have become redundant. The new multi-purpose products pipeline government project was in place until 31 March 2012.

The amendments to Schedules 1, 4, 5 and 6 of the Act are for implementation on 1 January 2020.

Notice issued by the Economic Development Department

  1. The Economic Development Department has published a notice on 16 September 2019 providing as follows (certain sections quoted from the notice):

1.1     The purpose of these regulations is to prescribe administrative fees that are payable by an applicant when applying to Import and Export Control for a permit.

1.2     The initial amounts of the administrative fees payable by an applicant for a permit issued by Import and Export Control are as follows:

1.2.1   Import permit: R900; and

1.2.2   Export Permit: R900.

1.3     Comments to be submitted to: Ms Linda Herbst at LHerbst@economic.gov.za within 14 days from the date of publication of the notice.

SARS notice

SARS advised that applications for renewal of licences (including removers in bond and clearing agents) can now be done at the Alberton office. The application for renewal should reach SARS 30 days prior to the expiry date of the licence and the turnaround time for renewal applications is 10 business days.

Notice issued by the Department of Trade and Industry

  1. The Department of Trade and Industry issued the following notice on 6 September 2019, effective within 6 months thereof in terms of the National Regulator for Compulsory Specifications Act, No 5 of 2008, as amended by the Legal Metrology Act, No 9 of 2014. It states, inter alia, as follows:

1.1     Application for official inspection and approval of the product(s) shall be made to the NRCS for every consignment of canned meat products which are imported into South Africa;

1.2     In the case of imported products, a factory/processing number/code applicable in the country of origin shall be made available to the NRCS; and

1.3     Imported canned meat products must originate from a facility approved for export in the country of origin and have the applicable permits as required by Department of Agriculture.

Please advise if additional information is required.

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