Provisional payments – how to avoid delays

By Mark Boucher and Taryn Hunkin In certain instances Sars may request a provisional payment (“PP”) before release of stopped imported goods will be granted. This PP is a form of security, and the payment is used to cover any possible under-payment of duties. PPs are called for in various instances, for example tariff and valuation investigations. Once the Sars investigation has been finalised, and should it be decided that the importer paid the correct duty at the time of customs clearance, the importer may apply to have the PP liquidated. If the investigation takes longer than expected and the PP is not liquidated within the specified time period, the payment will be estreated to revenue. And while the importer is still able to claim the PP back, this will need to be done by way of a refund application. The PP will be paid on the importation of goods which are the subject of the investigation and is called for as security for any antidumping, countervailing or safeguard duty that may be retrospectively imposed. South Africa, as a signatory to the World Trade Organisation, is bound by the the provisions laid down in the Agreement on the Implementation of Article VII of the General Agreement on Tariffs and Trade (“the Agreement”). The Agreement deals with the rules on Customs Valuation. Article 13 of the Agreement states: “If, in the course of determining the customs value of imported goods, it becomes necessary to delay the final determination of such customs value, the importer of the goods shall nevertheless be able to withdraw them from customs if, when so required, the importer provides sufficient guarantee in the form of a surety, a deposit or some other appropriate instrument, covering the ultimate payment of customs duties for which the goods may be liable. The legislation of each Member shall make provisions for such circumstances.” Essentially the Agreement says that in the case of a valuation query, Sars must allow release of the goods upon payment of a PP covering any possible additional customs duties that may become payable. Once the PP has been paid and the goods released, the matter should not be considered finalised. Any outstanding obligations to Sars ie, documentary requests and the like, must still be dealt with before the matter is considered closed. Failure to do so may result in Sars investigating future shipments by the importer. This could have a negative impact on the importer’s business, resulting in delays in the importer receiving the cargo, additional storage costs, and possibly even a loss of revenue due to cancelled customer orders.