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 41419 – 2018-02-02
Sunset review investigation of anti-dumping duties on clear float glass originating in or imported from Indonesia has determined that existing anti-dumping measures should be retained.
Last month's budget contained few surprises: the increase in the standard rate of VAT as well as increases in excise duties and environmental levies had been widely expected.
VAT on imported products is based on the Customs Duty Value plus ten percent and all other duties/taxes collected by SARS. The effective rate of VAT on imported products will thus be a minimum of 16,5%, up from 15,4%.
Importers are entitled to clear goods at the 14% rate until close of business on 29th March provided that they have all the necessary documents and Shipped on Board details for a consignment. Bidvest Panalpina Logistics cannot guarantee that any particular shipment will be cleared and released prior to this cut-off.
Importers and local manufacturers were affected by the following changes announced in the February budget:
Alcohol and tobacco products. Excise increased on all products by between 6% and 10%. Effective date 21st February 2018.
Increase in environmental levies on plastic bags and incandescent light bulbs of 4c/bag and R2 per bulb respectively.
Effective date 1st April 2018.
Increase in ad valorem excise Schedule 1 Part 2B.
These items increase from 5% to 7%+:
The following increase from 7% to 9%
Perfumes; fireworks; furs; air conditioners; telephones (including cell phones); microphones, loudspeakers & amplifiers; sound & video recorders; cameras; radios; television sets, monitors and projectors; motor cycles*; water scooters and similar products; firearms; gaming machines; video game processors used with television sets; golf balls.
Motor vehicles: excise duty is based on a formula which was previously capped at a maximum of 25%. The maximum has been raised to 30%
+These are nominal rates applicable to a calculation formula. The effective rate is always higher.
*Motorcycle classification is based on cylinder capacity and total engine capacity.
Importers are entitled to clear goods at the existing rates until close of business on 29th March provided that they have all the necessary documents and Shipped on Board details for a consignment. Bidvest Panalpina Logistics cannot guarantee that any particular shipment will be cleared and released prior to this cut-off.
SUGARY BEVERAGE TAX
We take this opportunity to remind importers of the looming introduction of the Health Levy on sugary beverages ("sugar tax)' in just one month's time on 1st April 2018.
Product labels and supplier invoices must show the total sugar content of the product as grams per given volume. Concentrates, syrups and powders must show the sugar content of the product after "preparation" (i.e. dilution/mixing, ready for consumption).
In the absence of this information or an acceptable analysis certificate SARS will collect the tax on an assumed 20g of sugar per 100ml volume. For importers this equates to R2.94 per litre.
All local manufacturers of beverages, beverage concentrates, and syrups are required to register with SARS as manufacturers. The deadline for registration is 16th March 2018. Collection of the tax as excise commences on 20th April.
SARS has arranged series of roadshows to be held around the country at the beginning of March to brief affected importers and manufacturers. We urge affected clients to seize the opportunity to attend one of these roadshows to gain a broader understanding of the new tax and to raise any issues that they may have regarding the tax.
To register with SARS to attend one of their roadshows click here
Exporters should note that the tax applies to South Africa only and is not applicable to goods sold in the BLNS countries or elsewhere. From 1st April exporters will be entitled to apply for refunds of any sugar tax that has actually been paid on any imported products that they export.
It is a specific SARS requirement that notice of the intention to apply for a refund must be stated on the original export entry. No post-export amendments to declarations will be permitted and exporters will not be allowed to claim refunds where this requirement is not adhered to. Client's export instructions must state whether a refund of sugar tax is to be applied for and provide details of the import declaration on which tax was originally paid.
Importers can defer the payment of sugar tax, VAT and any other duties on imported products for up to 24 months by holding these products in a licensed bonded warehouse. Bidvest Panalpina Logistics has bonded public warehouses available for use by clients at all major centres. For more details interested clients should contact their Bidvest Panalpina Logistics office.
BOND STORE REGULATIONS
Clients licensed by SARS to operate any form of bonded warehouse (including rebate facilities) must ensure that warehouse personnel are fully acquainted with the regulations pertaining to this type of operation and that there are no deviations from the stipulated procedures in their operation.
Operators/licensees should pay particular attention to any special conditions imposed by SARS in the bonded warehouse license issued to them.
The management of licensed facilities is one of the areas that will require licensees to ensure their personnel have satisfied SARS that they meet the "CKS" requirements of the Customs Control Act, 2014 when that Act is implemented. "CKS" stands for Customs Sufficient Knowledge: The Customs Control Act stipulates as a condition of licensing that importers/owners must employ at least one person who has passed an examination set by SARS on the subject.
The timing of the introduction of the CKS exam has not yet been confirmed.
SARS IMPLEMENTS RCG
The Customs Control Act imposes a stringent reporting regime on carriers and custodians of goods that are under customs control. Known as RCG (Reporting of Carriers and Goods) the system is being implemented by SARS from 1st April this year in terms of an amendment to the regulations on reporting requirements under the 1964 Customs Act and will be expanded to cover all transport modes by year-end.
The RCG requirements are background operations that should not directly affect most importers and exporters. Entities that must comply are shipping lines, airlines, forwarders, ports, terminals, depots and cross-border road/rail traffic.
Shipping lines must report the intention to load containers destined for South Africa before loading at the port of shipment commences. SARS has the right to order a ship not to load specific containers if they believe that the goods in those containers may contravene any law or regulation applicable to their import and distribution in South Africa. This could extend to permit, license and LOA requirements.
Bidvest Panalpina Logistics and its partner, Panalpina World Transport, are on track to have their RCG reporting system operational with SARS by the April deadline.
Traders exporting by road within Southern Africa (including the BLNS countries) should note that where the transport is handled by a commercial road carrier it is the responsibility of that carrier to comply with all RCG requirements. Exporters who opt to use their own heavy vehicles for cross border deliveries are also required to comply with the RCG requirements and are fully responsible for compliance.
Bidvest Panalpina Logistics accepts no liability for RCG compliance by client-appointed carriers.
USA TRUCKING UNDER PRESSURE
A strengthening economy, together with stricter Federal safety requirements imposed on transporters has created a shortage of trucking capacity in the USA, which is now starting to be reflected in rising prices for transport services as well as slower transit times for cargo.
This has been worsened by harsh weather conditions and higher world oil prices in recent months.
While weather conditions will improve as the northern spring sets in, the regulatory environment will not, and demand for transport services in the USA will likely remain strong.
Importers should be mindful of these trends, particularly that any internal transport costs in America form part of the value for customs duty purposes and affect the taxes due on importation: fortunately, the effects of rising freight costs has been offset by recent gains in the external value of the Rand and will only be noticeable if the currency reverts to former levels.
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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