On 05 February the South African Revenue Service (SARS) announced the substitution of Note 5 in Chapter 98 of Section XXII, in Part 1 of Schedule No.1 to the Customs and Excise Act, 1964, “Ordinary Customs Duty”, in order to implement the policy directive for the inclusion of semi-knocked down (SKD) vehicles kits as eligible products under the automotive production and development programme. The reasoning is contained in the International Trade Administration Commission of South Africa (ITAC) Minute M03/2020.
Note 5 in Chapter 98 of Section XXII reads:
“5.(a) Original equipment components for motor vehicles enumerated under heading 98.01 shall not include automotive components of which -
(i) the floor panels, body sides or roof panels are permanently attached to each other (except in the case of cabs for road tractors for semi-trailers of a vehicle mass exceeding 1 600 kg, for motor vehicles for the transport of goods of a vehicle mass exceeding 2 000 kg and a G.V.M. exceeding 3 500 kg and for chassis fitted with cabs of a mass exceeding 1 600 kg and a G.V.M. exceeding 3 500 kg in which case the cabs may be assembled and trimmed);
(ii) the engine and transmission assemblies, axles, radiators, suspension components, steering mechanisms, braking or electrical equipment or instrumentation are fitted to such floor pans or chassis frames; and
(iii) the bodies/cabs are fitted to floor pans or chassis frames (except in the case of vehicles of a mono built construction of a vehicle mass exceeding 2 000 kg).
(b) Original equipment components for specified motor vehicles as defined in rebate item 317.03, destined for assembly outside the borders of the Republic, must be in the form of kits that have untrimmed painted bodies with no parts assembled to the body.”
The Notice is accessible at:
Story by: Riaan de Lange
