On 27 May the South African Revenue Service (Sars) announced the introduction, on 05 June of, Part 5A of Schedule No.1 to the Customs and Excise Act, 1964 - “The Fuel Levy”, to give effect to the budget proposal to implement the carbon fuel tax as announced by the Finance Minister on 20 February 2019.
The tariff amendments to insert to Notes 6 and 7 after Note 5 in Section A to Part 5 of Schedule No.1 to the Act, 1964:
Note 6. Any fuel levy payable in terms of Part 5A consists of the general fuel levy and the carbon fuel levy.
Note 7. (a) For the purposes of item 195.10.03 the rate of fuel levy shall be the sum of the: (i) general fuel levy at a rate of 354 cents per litre; and (ii) carbon fuel levy at a rate of 7 cents per litre. (b) For the purposes of items 195.10.15; 195.10.17; 195.10.21 and 195.20.03 the rate of fuel levy shall be the sum of the: (i) general fuel levy at a rate of 339 cents per litre; and (ii) carbon fuel levy at a rate of 8 cents per litre. (c) For the purposes of item 195.20.01 the rate of fuel levy shall be the sum of the: (i) general fuel levy at a rate of 170.5 cents per litre; and (ii) carbon fuel levy at a rate of nil cents per litre.
The substitution of the following: Tariff Heading, Article, Description Rate of Levy Item, and Fuel Levy:
195.10.03 2710.12.02 Petrol, as defined in Additional Note 1(b) to Chapter 27 361c/li
195.10.15 2710.12.26 Illuminating kerosene, as defined in Additional Note 1(f) to Chapter 27, unmarked 347c/li
195.10.17 2710.12.30 Distillate fuel, as defined in Additional Note 1(g) to Chapter 27 347c/li
195.10.21 2710.12.39 Specified aliphatic hydrocarbons solvents, as defined in Additional Note 1(ij) to Chapter 27, unmarked 347c/li
195.20.01 3826.00.10 Biodiesel as specified in Additional Note 1(a) to Chapter 38 170,5c/kg
195.20.03 3826.00.90 Other biodiesel 347c/li
The tariff amendments to exclude the Carbon Fuel Tax, Part 3 of Schedule No.6 to the Act, 1964 - “Refunds and Rebates of Excise Duties, Fuel Levy and Environmental Levy - Rebates and Refunds of Fuel Levy and Road Accident Fund Levy”, as announced by the Finance Minister on 20 February 2019 to exclude the carbon fuel tax from the diesel refund scheme.
The insertion of the following Note(s) after Note 6(a)(xi) in Part 3 of Schedule No.6: (xii) fuel levy is limited to the general fuel levy contemplated in Notes 6 and 7 of Part 5A of Schedule No.1 at the rate specified in Note 7(b)(i) for distillate fuel and Note 7(c)(i) for biodiesel respectively of the said Part 5A.
The substitution of Note 6(b)(i) in Part 3 of Schedule No. 6 with the following: (i) Farming, forestry or mining on land is, 135.6 cents per litre fuel levy on 80% of eligible purchases, plus 198 cents per litre Road Accident Fund (RAF) levy on 80% of eligible purchases equalling 333.6 cents per litre on 80% of the total eligible purchases. Mode of calculation of refund is as follows: (aa) For 1,000 litres eligible purchases - 1,000 x 80% equals 800 litres on which a refund of 333.6 cent per litre may be claimed; (bb) For 1,000 litres purchased of which 300 litres represent non-eligible purchases, for example, carriage of goods for reward – 1,000 litres less 300 litres equals 700 litres eligible purchases x 80% equals 560 litres on which a refund of 333.6 cents per litre may be claimed; The substitution of Note 6(b)(ii)(gg) in Part 3 of Schedule No.6 with the following: (gg) vessels employed to service fibre optic telecommunication cables along the coastline of Southern Africa, is 339 cents per litre fuel levy, plus 198 cents per litre RAF levy equalling 537 cents per litre.
The substitution of Note 6(b)(v) in Part 3 of Schedule No.6 with the following: (v) Distillate fuel used solely as fuel in electricity generation plants with a capacity exceeding 200 megawatts per plant, generating electricity for the national distribution network, is 169.5 cents per litre fuel levy, plus 198 cents per litre RAF levy equalling 367.5 cents per litre.
Story by: Riaan de Lange
