‘Understand rebates when sourcing inputs’

THE INCENTIVES offered by the Trade and Industry Department are manifold and, in sourcing inputs at world market prices, cognisance should be take of specific rebates, refunds and drawbacks of customs duty on these imported inputs, says Safcor Panalpina customs consultant Johan Marais. “In this regard the Customs and Excise Act provides for a full rebate of duty and exemption from payment of value-added tax on imported goods used exclusively in the manufacture of goods for export. The benefit is however subject to a permit issued by the International Trade Administration Commission (ITAC). And while the Commission has undertaken to consider these applications within 14 days, the requirement that an exporter has to prove the export could create uncertainty in medium and longer term planning,” Marais points out. The anomaly here is that only goods that are subject to customs duty qualify for the rebate; duty free goods do not and will be subject to payment of value-added tax at the time of importation. What is evident, according to Marais, is that the customs and excise compliance requirements in terms of export transactions are far more focused and the responsibility of proving that goods originate in South Africa rests squarely on the exporter.