APPLICATIONS FOR CHANGES IN CUSTOMS DUTIES
No applications for changes in rates of customs duty were published during January.
THE BUDGET: 21 FEBRUARY IS D-DAY
Following a year of political turmoil and weak economic activity the current Minister of Finance will present his first full budget to Parliament on Wednesday 21st February. Many commentators expect that the budget will be "tough" and have predicted a wide range of possible tax increases and other measures to boost revenue collection in the face of a deficit estimated to exceed R50-billion.
The Minister is entitled to increase duties and taxes immediately, although this prerogative has not been exercised in South Africa during the modern era.
Importers and owners of bonded goods wishing to clear these prior to any possible budget announcement must provide their Bidvest Panalpina Logistics office with all required documents as soon as possible: importers are permitted to declare goods and pay duties at any time after the goods can be proved to be loaded on board the ship or aircraft that removes them from the country of supply. Importers should make it clear in their instructions that the shipment/s is/are to be cleared immediately.
Bidvest Panalpina Logistics will endeavour to process any such shipments prior to the budget cut-off provided that all documentary and other requirements have been met or complied with, but accepts no liability for any delays howsoever caused.
NIGERIA CONTAINER PACKING REQUIREMENTS
Nigeria has made the palletisation of all cargo shipped to that country in containers after 1st January this year obligatory.
Exceptions are motor vehicles on own wheels if they are capable of being rolled out of the container for inspection; cargo with special handling requirements for safety provided that customs officers are able to access the cargo whilst it is still in the container; and where cargo is stowed in the centre of a container with a gangway or aisle having a minimum width of 61cm on all sides of the cargo.
THE SUGAR TAX IS HERE
SARS has confirmed that tax on drinks containing sugar will be introduced from 1st April this year as part 7A to schedule 1 of the Customs & Excise Act. Collection of the tax on locally produced goods will commence on 20th April.
Officially termed a "Health Promotion Levy" the sugar levy will apply to products classified in the Harmonised Customs Tariff under the following headings/sub-headings:
1806.10.05 Preparations containing cocoa powder and added sugar or other sweetening matter for making beverages.
1901.90.15 Other preparations for making beverages
2106.90.20 Syrups and other concentrates or preparations for making beverages, not having a basis of fruit juice
2106.90.22 Syrups and other concentrates or preparations for making beverages, with a basis of fruit juice
2106.90.69 Drinking straws, containing flavouring preparations
2202.10.10 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured: in sealed containers holding 2,5li or less.
2202.10.90 Other waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured
2202.91.20 Non-alcoholic beers in sealed containers holding 2,5li or less
2202.91.90 Other non-alcoholic beers
2202.99.20 Other non-alcoholic beverages in sealed containers holding 2,5li or less
2202.99.90 Other non-alcoholic beverages
The sugar levy on all items is 2,1 cents per gram of sugar content in excess of 4g/100ml.
Importers of affected products must ensure that they are in possession of specifications for the products at the time of import. Foreign suppliers must stipulate on their invoices the sugar content in grams per 100ml of volume for each product invoiced. We urge importers to begin collating this information without delay.
Invoices should reflect the volume (in litres) of all products. Invoices for powdered or concentrated products should also stipulate the dilution ratio of the product. This is because the tax is calculated on the sugar content of the final product after dilution, ready for consumption.
Exporters wishing to claim a refund or drawback of sugar tax must ensure that their intention to claim is endorsed on their export declaration: SARS has indicated that no post-declaration amendments for refunds will be considered.
Refunds of the sugar tax can only be claimed for imported products on which tax was actually paid after 1st April.
ALCOHOLIC BEVERAGE LABELS
Labelling requirements for alcoholic beverages were amended in a Government Notice published on 22nd December (Government gazette 41350). From 22nd December 2020 all alcoholic beverages offered for sale in South Africa are required to exhibit each of the mandatory health messages "with equal regularity to every other message, on each product line, within a thirty-six months cycle".
Amended regulation 2(ii) now appears to also require that the warning message must cover one eighth of the total size of the container.
Importers clearing alcohol products into bond during 2018 and in the future, should ensure that these comply with the new labelling regulations because some of these items may possibly still be in retail supply chain after the 2020 implementation date.
NEW CUSTOMS ACT PROGRESS
SARS is proceeding with the implementation and testing of enhanced cargo reporting systems envisaged in the new Customs Control Act. To this end the department is also revising existing reporting regulations under the current (1964) Act to align these with future requirements.
Entities affected by the revised regulations are shipping lines and airlines, road carriers, freight forwarders, cargo terminals and depots. The reporting requirements also apply to any person or business using its own truck to deliver or collect goods in any neighbouring country.
The expected kick-off date for the revised reporting procedures is 1st April.
Lithium batteries are hazardous cargo and are only carried under stringent declaration, packing and handling conditions, particularly by air. Importers and exporters should note that devices fitted with a battery are exempt but that any supply of a spare battery with a device requires that the entire consignment be accorded "dangerous goods" status.
THE 3-DAY RULE
The generous time-lines allowed to importers to clear cargo through customs will be drastically shortened when the provisions of the 2014 Customs Control Act are implemented. While the legislation will still allow pre-clearance of cargo, the deadline for submitting declarations to SARS will be reduced to three working days after arrival in all cases except for imports by road: these must be cleared immediately the conveying vehicle crosses the border.
Failure by importers to have cargo cleared within the time limit will lead to automatic penalties being imposed and the provisional seizure of goods; more serious disadvantages such as the loss of right to clear under any procedure other than duty paid may also apply. Importers will be permitted to apply for extensions on individual shipments prior to expiry of the time limit, but extensions granted will also carry conditions and be for a maximum of seven days, all of which will add to the importer's costs.
The most common cause of delays in clearing is inadequate, incomplete or missing documentation. Responsibility for providing proper and adequate documents in time rests with solely with the South African consignee. It is essential that all purchase contracts stipulate South African documentary requirements quite clearly to foreign suppliers. It is also essential that importers ensure that they have all necessary permits licences authorisations or letters of authority in place before allowing suppliers to ship cargo: SARS has the right to prohibit shipping lines from loading containers suspected to contain goods that may not comply, on arrival, with South African requirements.
One of the most important clearing documents is the importer's written clearing instruction. The requirements for this document are laid down in both the customs laws and regulations, including the requirement that the person signing the instruction must have specific written authority from his/her employer to do so.
Equipment breakdowns, poor productivity, ongoing repairs and rehabilitation work at Durban are problems that often force carriers to amend their schedules along our coast with little or no warning.
Delays and re-scheduling are the "New Normal" at Durban. Bidvest Panalpina Logistics monitors the situation and advises clients of any major occurrences that may affect their cargo. It is impractical to report every schedule change or other event, but we will continue to advise clients where there is any marked deviation from the "New Normal".
A new Shipping line, Ocean Network Express ("ONE"), is set to come into being when the ocean freight businesses of three major Japanese Lines (MOL, K-Line and NYK) are merged from 1st April. The new entity may control 7% or more of world freight.
South African shippers may be affected by service rationalisation and pressures to increase rates.
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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