APPLICATIONS FOR CHANGES IN CUSTOMS DUTIES
The following applications for changes in rates of customs duty were published in the past month. Interested parties must submit comments to ITAC within 4 (four) weeks of the date the notice was first published unless otherwise stipulated.
Government Gazette 40154 – 2016.07.22
SARS' implementation of the electronic manifest requirements for exports by road continues apace and the acceptance by SARS of manually produced (paper) manifests is expected to be phased out shortly.
The operators of all commercial vehicles carrying exports across South Africa's land borders are obliged to electronically lodge a separate manifest with SARS for each vehicle leaving the country. The manifest has to reflect each consignments on the vehicle as well as details of the MRN ("bill of entry") on which the cargo has been declared to SARS.
The MRN, manifest and SARS final gate control (CN2) are an integrated control mechanism and are essential for all exporters who are required to produce evidence that cargo has actually left South Africa in order to substantiate their claim of output VAT at the zero rate. It should be noted that although the VAT regulations still refer to "customs stamped documents" as being evidence of export, systems automation at border posts means that data is scanned or otherwise electronically captured on exit from the country and that the physical stamping of documents no longer occurs. In terms of the draft regulations to the new Customs Control Act the only acceptable proof of export by road from South Africa is the CN2 and copy of the manifest showing departure from South Africa. (Rule 16.6(d))
Clients arranging their own transport for cross-border exports should ensure that their chosen carrier is acquainted with all relevant customs requirements and is submitting manifests electronically to SARS. It is the exporter and the carrier's responsibility to ensure that the cargo only leaves the country on the customs declaration reflected on that manifest and on the vehicle to which the manifest refers and no other. It is also that carrier's responsibility to ensure that his driver makes certain that the manifest number is captured on final departure at the exit gate from the border control post. Failure to do so could result in SARS rejecting the exporter's claim to zero-rate the sale and the possible imposition of penalties.
ZIMBABWE IMPORT BAN
Zimbabwe's recent prohibition of the import of a wide range of consumer goods from South Africa continues, with Zimbabwe government officials describing the ban as a "safeguard measure".
At the same time the country's revenue authority, ZIMRA, has backed down from a total prohibition on the import of listed items to permitting limited quantities to be imported by private individuals not more than once per month. Quantities allowed include 1Kg of coffee creamer, 1 litre of Ice cream and up to 4Kg of washing powder.
SARS "CONCESSIONS" TO FALL AWAY
Any benefits or easements permitted by Customs to individual traders under the current customs legislation will fall away when the new Customs Acts are implemented. In terms of the new legislation beneficial treatment will in future only be accorded to qualifying accredited entities.
Clients who perform any activity that is at variance with the legislation in terms of written permission granted to them by SARS will need to reapply for the dispensation to continue when the new Act comes into force.
Failure to do so could negatively impact these importers and exporters who may unwittingly find themselves in breach of the law.
SEAFREIGHT RATE INCREASES
Many shipping lines have announced general increases in their freight rates from the Far East to South Africa following an upsurge in freight bookings for the second half of 2016 and a general reduction in the availability of shipping space.
Increases announced thus far are as high as US $500 per TEU. Bidvest Panalpina Logistics is in negotiation with many of the affected carriers in an effort to mitigate these increases for the benefit of our clients who nominate Panalpina as their forwarder.
Readers are reminded that Wednesday 3rd August has been proclaimed a public holiday in order to facilitate the 2016 municipal elections. Tuesday 9th August is also a public holiday (National Women's Day).
The close proximity of these two holidays to one another and the reduced operating hours at various transport facilities on these days may result in minor delays to cargo during the first half of August.
REBATE PERMIT REQUIREMENTS- SCHOOL SHIRTS
The Department of Trade and Industry has published revised guidelines for Schedule 4 rebate permits under to the Customs & Excise Act issued to manufacturers importing polycotton fabrics under tariff heading 311.40/5513.21/01.06 for the manufacture of school shirts. (Government Gazette 40125, 8th July 2016).
Future permits under this schedule will be subject to compliance by the importer/manufacturer with the following:
ITAC will engage with local producers to establish that they cannot produce the required fabric before issuing any permits. Permits will also be linked to manufacturer's compliance with job creation undertakings that they will be required to provide.
LATE CLEARANCE PENALTIES
South Africa's customs legislation mandates that arriving imports must be declared to customs within a specified number of days of their arrival in the country. Depending on the mode of transport the leeway allowed in the legislation currently ranges from 7 to 28 days.
The new Customs Control Act of 2014, when implemented, will sharply reduce the leeway permitted to importers to just 3 days after arrival of the goods at a South African port or airport. In the case of seafreight cargo to be released at an inland terminal the deadline will be reduced to three days before the scheduled arrival of the carrying vessel.
The law has up to now not been strictly applied and a fairly lenient attitude has been taken where cargo has been cleared late. This is now changing, possibly as a prelude to the implementation of the new customs legislation. SARS has begun imposing fines of up to R1500 on importers whose cargo has not been cleared within the requisite period. Under the new legislation SARS will not have any discretionary powers in raising penalties against importers; mandatory penalties will also be much higher.
Clients should begin raising their compliance levels without delay to the standards that will be required by the new legislation when implemented.
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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