The serious business of in-bond acquittals

In bond and in transit movements pose a substantial financial risk to Sars since VAT and duty on these entries have not yet been brought to account. Where goods are moved in transit/in bond it is necessary to acquit the entry with Customs ie, prove that the goods have reached their final destination (as declared on the bill of entry) and were not entered for home consumption. If unable to provide Sars with the necessary acquittal documentation when requested to do so, one will be liable for the VAT and duties applicable to the entries in question, as well as penalties and possible forfeiture. The Customs & Excise Act 91 of 1964 (“the Act”) allows 30 days from the bill of entry date in which to obtain the acquittal documentation for record purposes. If day 30 falls on a Sunday or public holiday then the acquittals must be obtained on the last working day before the Sunday or public holiday. Sars has chosen to acquit entries on a risk-based system. In terms of the risk-based acquittal system/ process, clients must obtain their acquittal documents within the 30-day period and retain the documents for record purposes. Sars will issue a letter requesting the required acquittal documents. Clients then have seven days from the date of the letter in which to present the requested documentation to Sars. In terms of Rule 18.7(b) of the Act, there is no provision for an extension of this 7-day period. It is therefore not possible for a Sars official to permit any extension of this time period. If, for whatever reason, the client expects that they will not be in a position to obtain the necessary documentation within the 30-day period, they must, before the end of that period, notify Sars in writing or bring duties and VAT to account as if the goods had been entered for home consumption. If the client opts to make payment of the duty and VAT and is later in a position to provide the acquittal documentation to Sars, he may then submit a refund claim to sars for the amounts paid. Sars view acquittals of in bond and transit movements very seriously. If, for example, you operate as a clearing and forwarding agent and do not submit your acquittals timeously, not only do you stand to incur huge financial costs, but you also run the risk of having your counter closed by Sars. If you are unsure of what acquittals are outstanding, it is strongly recommended that you contact Sars and request a print-out reflecting your un-acquitted entries on their system. It is also advisable to retain proof of receipt of acquittal documentation since Sars may request copies of acquittal documents which have already been submitted.