APPLICATIONS FOR CHANGES IN CUSTOMS DUTIES
The following applications for changes in rates of customs duty were published in the past few weeks. Interested parties must submit comments to ITAC within 4 (four) weeks of the date the notice was first published unless otherwise stipulated.
Government Gazette 40621 – 2017-02-17
South African customs legislation has always required that any agent submitting a clearance declaration to the customs authority on behalf of his principal must have a written instruction to do so. It is only recently (October 2016) that the customs regulations have been revised to include a detailed list of the items that must be addressed in this instruction. As a result, Bidvest Panalpina Logistics' standard "Importer's Clearing Instruction" form has been revised to comply with the SARS requirements. The wording of the signatory's declaration on the instruction form also follows a formula mandated by SARS.
We request that instructions issued by clients to us utilise this format and no other; we understand that customs has begun raising penalties of R1000 or more when it is found that the clearing instructions are incomplete or non-specific.
BOND STORE REGULATIONS
Clients operating bonded warehouses should regularly review their operations to ensure that warehouse personnel are fully acquainted with the regulations pertaining to this type of operation and that no deviations from the required procedures have been allowed to creep into their operation.
Operators should particularly refer to any special stipulations by SARS in the bonded warehouse license issued to them by SARS.
The operation of bonded and rebate facilities is one of the areas that will require licensees to employee personnel who have satisfied SARS that they meet the "sufficient knowledge" requirements of the Customs Control Act when that Act is implemented.
WHAT ABOUT INSURANCE?
The recent incident aboard the "APL AUSTRIA" off Port Elizabeth should once again focus shipper's attention on the risks faced by their cargo in transit. A fire aboard the vessel took some time to be brought under control and the ship had to be berthed at Coega to extinguish the flames. In addition to the cargo that caught fire other shipments aboard the vessel may have been damaged by heat, smoke, water or firefighting activities. The hold in which the fire occurred was reportedly flooded to a depth of 12 metres.
The only Incoterms®2010 that specifically require the seller of goods to arrange insurance cover are CIF and CIP. Under all other Incoterms®2010 buyers and sellers carry their own risks and obtaining insurance cover is at their discretion.
Where goods are purchased under Incoterms®2010 CIF or CIP it is customary for the insured value to be reflected as a percentage increase on the contract price. Sometimes this value may not reflect the true risk carried by the buyer, bearing in mind his liability for VAT on any settlement received from a foreign underwriter.
NATCOR LINE CLOSURE
Transnet has released details of its rail maintenance shutdown schedule for 2017. The Durban/Gauteng rail line (Natcor) is scheduled for either partial or complete closure at times during the week of 9 - 15 May 2017. Shippers should expect delays in cargo movements during this time.
THE 2017 BUDGET
The Finance Minister's 2017 budget, presented by him to Parliament on 22 February, made it quite clear that the valuation of imports and exports is going to come under increasing scrutiny in the future. Although only a single passing reference to transfer pricing was made by him in his speech, saying that SARS would "…strengthen its efforts to curb tax avoidance and evasion and address transfer pricing – a component of illicit financial flows".
More detail was provided in the budget review tabled with it, which says that "SARS is updating the Transfer Pricing Practice Note in line with OECD Transfer Pricing Guidelines to include new guidance on the arms-length principle and an agreed approach to ensure appropriate pricing on intangibles that are difficult to value."
It is essential that importers correctly declare on their instructions whether their business is "associated" with a foreign supplier by any arrangement other than the contract of sale for the goods they are buying and that the nature of this relationship is clearly stated. Any changes in relationships or pricing policies must immediately be notified to SARS (Customs), especially where a Value Determination has already been issued by SARS.
Minister Gordhan also confirmed that the "Sugary Drink Tax" would be introduced this year and that collection of this tax would be in terms of the Customs legislation. Although the full scope of this tax has not been finalised and it is not clear to what types of sugar it will apply, we recommend that importers of affected products begin preparing for this by establishing the sugar content of affected products imported by them and having suppliers stipulate this on invoices, expressed in grams/litre.
The tyre levy, collection of which was taken over by SARS at the beginning of February, is also applicable to all pneumatic rubber tyres fitted to original equipment, including bicycles. The levy is also collected where wheel rims pre-fitted with tyres are imported.
Suppliers' invoices for all imports that include pneumatic rubber tyres, whether loose, on rims or fitted to vehicles/equipment, must stipulate the type, size and nett mass per tyre. Where equipment is imported without tyres this fact must be clearly and unambiguously stated on the supplier's invoice.
This communication is published for general information and is not intended as professional advice of any kind. While every reasonable care has been taken to ensure the integrity and accuracy of the information contained herein, no liability or responsibility is accepted by Bidvest Panalpina Logistics or its employees for any damage or loss of any nature whatsoever resulting from the use or reliance upon this information.
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