Customs addresses transit acquittal issue

Technology could help to lighten the burden
JOY ORLEK
SA REVENUE Service has agreed to look into ways of streamlining transit cargo acquittals following complaints from several exporters that the 30-day limit is a difficult target to meet. Current legislation requires removal in transit cargo (RIT) to be shipped within 30 days of acquittal. “It’s a very delicate subject amongst the tea and coffee exporters,” said one agent, while copper exporters are equally unhappy, according to another. “It is almost impossible for our client to ship his cargo within the 30-day period and we are being penalised R1 000 for each entry acquitted even one day over the 30 day period,” the agent told FTW. “We acknowledge the burden imposed on the clearing community to comply with legal requirements in this area,” said general manager – operations for the Gauteng region, Vuso Shabalala. “It is also true that there must be and there are less burdensome ways of achieving the legal intent. “Just to give the matter balance may I also add that administering acquittals is generally regarded as a thankless task by customs officials and one often done under pressure from management, themselves under pressure from the auditor general. This is so largely because most follow-ups of outstanding acquittals actually do not result in measurable results except just the knowledge that acquittals have been made. It is primarily a control issue and a response to the fact that rogue traders make transit entries to evade customs controls”. Shabalala concedes that the submission of documents stamped by customs on exit of the goods is an unnecessarily difficult way to effect acquittal. “Where for example the export is captured in the Sars information system a simple reference number would enable Sars to match the export entry with the initial transit entry. Greater cooperation between business and Sars in the use of technology would therefore help lighten the burden on both the public as well as Sars.” It’s an issue which the SA Association of Forwarders has been addressing with Customs at national level, says Ian Cooper of Beitbridge-based Cargo Services. And he believes that the industry has failed to take advantage of an initiative put in place by customs a few years ago to address the issue. “In the case of copper, for example, because it’s duty free it can’t be warehoused in terms of section 21 of the Act. “But there is a provision that warehouses can apply for an SOS or special operating permit which allows you to warehouse duty-free goods for up to six months. “Furthermore, if you require extra time you can apply to the local controller for a further three months. If it’s granted you have nine months as opposed to 30 days.” It’s a facility of which few agents have taken advantage, says Cooper. Customs challenges the claim that it is difficult to acquit within thirty days. “Traders import goods for re-export. At the time of import they enter the goods in transit. The meaning is that such goods are not going to be kept in South Africa but are going out to the export destination and for this reason payment of duties and VAT on the import are suspended. “Surely it does not take more than thirty days for goods to be transported from say Beitbridge to Durban or Cape Town? Unless, as often turns out to be the case, the transit entry is merely a gag so that customs will not pay too much attention to the goods. The question must indeed be asked why someone would import goods for re-export and then want to keep them in South Africa for three months or up to nine months!” said a Customs source. “If it is necessary for any reason then the entry made to Sars should be a warehousing entry and not a transit entry. But that too only gives the trader more time before she has to acquit when the goods are introduced into the local market or exported. And the same question still remains as to why a trader would want to have capital tied in goods kept in a warehouse for nine months. Sars’ experience is that more often than not the intention is to evade customs.” What is clearly crucial is that legitimate traders must form a partnership with Sars to work out a regime that both reduces the costs of compliance and administration while at the same time minimising compliance risk.