Duty Calls


Chemical Rebate Court Case Judgement On 28 August the South African Revenue Service (Sars) revealed details of the judgement of 15 August in the case of Acti-Chem SA (Pty) Ltd versus the Commissioner for Sars (CSARS) [(8540/2017) [2019] ZAKZPHC 58 (15 August 2019)] relating to whether the rebate claimed by ActiChem in terms of rebate item 306.07 was warranted. Schedule No 3 to the Customs and Excise Act, 1964 involves, “Industrial Rebates of Customs Duties”, Part 1 “Goods Used in the Manufacture of Other Goods”, 306.00 “Products of the Chemical and Allied Industries”, 306.07 “Industry: Polishes and Creams”. Rebate item 306.07/34.04/01.04 “Prepared waxes, not emulsified or containing solvents”, for which the extent of rebate is full duty. The crux is in paragraphs 22 and 23 of the judgement: Paragraph 22. The language of the provisions, the context of the CSARS, the powers in question, and the purpose of rebates are to show that the ultimate, exclusive use of the imported goods must be for the manufacture of polishes or creams. Also, that the polishes and creams must be manufactured by a rebate registrant. This interpretation is consistent with the constitution. No argument to the contrary has been raised by Acti-Chem. Since ActiChem does not manufacture polishes and creams and the entities to which ActiChem sells Quecolin are not rebate registrants, the rebate claimed by Acti-Chem does not apply. Paragraph 23. In the result, the application is dismissed with costs which include those consequent upon the employment of two counsel wherever this was done.

Rebate for Robbery or Theft – Comment due On 27 August Sars proposed draft amendments to rebate items and refund items 412.09/00.00/01.00; 495.00/00.00/01.00; 497.01/00.00/01.00; 624.50/00.00/01.00; 634.03/00.00/01.00; 670.10/00.00/01.00; 680.02/00.00/02.00 and 690.01/00.00/01.00 in Parts 1,4 and 5 of Schedules No 4 and Part 1G, 2, 3, 4, and 5 of Schedule No 6 to the Act, 1964 to exclude duty rebates in circumstances where damage, destruction or loss of goods as contemplated in those items occurs due to robbery or theft. These are in line with an international tendency to disallow duty rebates in cases of robbery or theft, the rationale being that the amount of any duty payable should be covered by an insurance policy. Comment is due by 11 September.

VAT Rebate for Robbery or Theft – Comment due Sars on 27 August announced a draft amendment to Item No 412.09/00.00/01.00 of Schedule No 1 to the ValueAdded Tax Act, 1991 was due to the amendment of rebate item 412.09/00.00/01.00 in Part 1 of Schedule No 4 to the Act, 1964. Comment is due by 11 September.

Economic Policy Paper – Comment due National Treasury on 27 August published its 77-page “Economic transformation, inclusive growth and competitiveness: Towards an Economic Strategy for South Africa”, on which comment is due by 15 September.

Duty Calls Watchlist Comment on the proposed rebate of the customs duty on caustic soda; and the review of the “general” rate of customs duty on coated steel is due by 20 September.