Beware: SARS new Customs legislation
18 August 2015
Posted by: Author: Alison van den Berg
Author: Alison van den Berg (BDO South Africa)
During 2014, SARS promulgated new legislation which is set to replace the existing Customs and Excise Act 91 of 1964. The new Customs Control and Customs Duty Act of 2014 will only become effective on a date to be announced in the near future, as SARS is still in the process (now relatively advanced) of drafting all the procedural Rules supporting the new Acts. The elusive "effective date” when the new legislation will kick in to change the entire customs legal landscape with dramatic effects, has proved to be like a retreating mirage - earlier predicted for July this year, and now postponed to "late 2015 or early 2016”.
This means that all affected businesses will need to keep an eye out for the warning from SARS and notice of the arrival of the "effective date – or face effectively losing their registration/licence which is required to carry on the activities they are involved in.
SARS has proclaimed to the Public that it will "give adequate notice as to when registration and licensing applications may be submitted in terms of the Customs Control Act, 2014”. This promise implies a warning that the new legislation will require re-registration in all customs categories and there is bound to be a rush by all importers, exporters, clearing agents, and any other persons presently registered with SARS in terms of the Customs and Excise Act of 1964, to re-register in terms of the new dispensation.
So who exactly is affected by this ‘warning'? What do the timelines look like? And what happens to those who simply had no idea that re-registration was required? This depends on the category of registration and what the Transitional Provisions of the Act have to say on each.
The first clear distinction is between Customs and Excise matters, as the new legislation deals with Customs. The new legislation for Excise has not yet been drafted, and the piecemeal balance of the existing Act will continue to apply in the interim for Excise purposes. Furthermore, the new Customs Control Act changes the categories to an extent, and in some cases now requires a licence for activities where to date only registration was required. The new Act therefore clarifies the position for various categories of registration and licensing as summarised below.
- An existing customs registration lapses 30 days after the effective date, unless the holder of that registration (before the expiry of the 30 days) submits an application to the customs authority for a new registration to replace the existing one. Once submitted in time, the existing registration continues to be in place until the new registration has been processed by SARS.
- Where the new Act requires licensing for a matter which the 1964 Act required only registration for, the registered person must apply for a licence (in terms of the new Act) and their registration is treated as a licence which must be renewed.
- An existing customs licence also lapses 30 days after the effective date unless the licensee before the expiry of that period submits an application for a new licence to replace it. Similarly, as long as the application is submitted on time, the existing licence stays in place until the authority has dispensed with the new application.
- An existing excise registration or licence is not affected by the new Act and continues to be in force until new provisions in this regard are enacted in future by way of the Excise Duty Act.
- Accredited status granted in terms of the 1964 Act before the effective date: people with only first level accreditation status for customs (as opposed to excise) registration/licence purposes will lose this as it lapses. Those who presently have second or third level status accreditation are better off: people with second level accredited status will achieve first level status in terms of the new Act, and those with third level status will be regarded as second level in terms of the new Act.
- Any security provided to SARS in terms of the 1964 Act may, after the effective date (but before any specified expiry date of the security), be used by SARS for the payment or recovery of tax or "other money” owed to SARS in terms of the 1964 Act. SARS is still entitled to request additional security for purposes of the new registration.
This article first appeared on bdo.co.za.