In recent columns you have been informed of changes and proposed changes to Rebate Item 470.00 ie, “Goods temporarily admitted for processing, repair, cleaning, reconditioning or for the manufacture of goods exclusively for export”. The changes are however predominantly applicable to Rebate Item 470.03 (Schedule No.4 Part 3 to the Customs and Excise Act that relates to “Goods Temporarily Admitted under Rebate of Customs Duties”.) Since we did not deal with these collectively, you may well have missed the significance of these changes. There are in essence three Rebate Items under Rebate Item 470.00, namely (i) Rebate Item 470.01 that deals with “Goods for processing, provided such goods do not become the property of the importer”; (ii) Rebate Item 470.02 “Goods (including parts thereof) for repair, cleaning or reconditioning”, and “Parts for goods temporarily imported for repair, cleaning or reconditioning”; and (iii) Rebate Item 470.03 “Goods (excluding goods free of duty as contemplated in section 75A) cleared in terms of a permit issued by the International Trade Administration Commission, for use in the manufacture, processing, finishing, equipping or packing of goods exclusively for export”, and “Goods free of duty, for use in the manufacture, processing, finishing, equipping or packing of goods exclusively for export”. With respect to these Rebate Items, South African Revenue Service (Sars) has an “External Reference Guide – Rebate Item 470.03”, which provides a detailed overview of the Rebate Item. To recap: (i) On 11 November 2011, Note 5 was inserted - “5. For the purposes of rebate item 470.03/00.00/02.00: (a) Where the rebate registrant is contractually entitled to keep a portion of the goods manufactured, processed, finished, equipped or packed in lieu of payment for the operations carried out, he or she must – (i) also export those goods within the period of 12 months contemplated in Note 2(a); or (ii) (aa) process a bill of entry at the office of the Controller for payment of the value-added tax on the goods retained; and (bb) adjust by voucher of correction the rebate bill of entry in respect of the quantity and value of the goods used to manufacture the goods retained. (b) Notwithstanding the Notes to Schedule No. 3 and Schedule No. 4, “full duty” where it appears in the “Extent of Rebate” column opposite this rebate item means goods free of duty as contemplated in section 75A”. It is apparent that this Rebate Item relates to the importation of goods that have a rate of customs duty that is free ie, 0%. According to the Government Gazette notice this amendment would be effective from the date on which Section 149 in the Taxation Laws Amendment Bill, 2011, is promulgated in the Government Gazette. (ii) On 11 November 2011 Rebate Item 470.03/00.00/02.00 was inserted ie, “Goods free of duty, for use in the manufacture, processing, finishing, equipping or packing of goods exclusively for export”. It is apparent that the intention of this provision is for imported goods that have a rate of customs duty that is free ie, 0%, would be able to be imported using this Rebate Item. According to the Government Gazette notice this amendment would be effective from the date on which Section 149 in the Taxation Laws Amendment Bill, 2011, is promulgated in the Government Gazette. (iii) On 18 November 2011 comment closed with respect to a tariff application by the International Trade Administration Commission of South Africa (Itac) for the proposed creation of a Rebate Item, under Rebate Item 470.03 for yachts. The Rebate Item is proposed to read “Goods cleared in terms of a permit issued by the International Trade Administration Commission, for use in the manufacture, processing, finishing or equipment of yachts, classifiable in tariff heading 89.03 exclusively for export, within 3 years from the date of entry thereof”. The reasoning for the tariff application is that the construction of the yachts takes longer than the currently prescribed one-year period in terms of Rebate Item 470.03. An investigation of this nature can take anything from six to nine months to complete. If you are presently making use of any of the Rebate provisions under Rebate Item 470.00, or intend to do so in the future, it is imperative that you account for the proposed amendments that will afffect you, specifically if you are using the Present Rebate Item 470.01 to import goods which are customs duty free ie, have a rate of customs duty of 0%.