Customs Duty and VAT Implications on Imported Goods

Source: SARS Guide – Customs Duty Implications on Imported Goods dated 08 February 2023
Reference Acts: Customs and Excise Act, 1964
Value-Added Tax Act, Number 89 of 1991, as amended

One of the key objectives of the Customs and Excise Act 91 of 1964 (the Act) is to levy customs duty and to ensure that the correct amount of customs duty on imported dutiable goods is paid when due.

Your customs duty implications on imported dutiable goods are determined by the tariff classification, valuation, origin of the goods, and if the value of the goods is expressed in foreign currency by the rate of exchange used for conversion of foreign currency to the Rand.

Evading payment of the correct amount of customs duty harms the economic and fiscal interests of the state and can result in unfair competition. The state thus also has an interest in ensuring any procedure that allows duty not to be payable has been duly complied with.

The onus rests on the person entering the goods to assess duty liability, enter the goods correctly and pay the correct duty due. Failure to do so may result in additional costs such as detention costs, additional duties and value-added tax (VAT), penalties, and in some cases, forfeiture or seizure of the goods. In serious cases involving false declaration, fraud or misrepresentation, or nondisclosure of any material facts, offenders may be liable for criminal prosecution.

Section 47(1) states that duty shall be paid for the benefit of the National Revenue Fund on all imported goods in accordance with the provisions of Schedule 1 at the time of entry for home consumption of such goods. This requirement is reinforced by section 39(1)(b). Duty is payable when the goods are entered for home consumption, but payment may be deferred under the proviso to section 39(1)(b).

The tariff classification code under which the goods are classified will determine the rate of duty applicable at the time of entry for home consumption. The time of entry for home consumption under section 45(2) is the time when the bill of entry is submitted.

Under section 55(2)(b), an antidumping duty or countervailing duty or safeguard duty may be imposed from the date a provisional payment is imposed on the goods concerned.

Some FAQs

How is the rate of duty determined?
The tariff classification code under which the goods are classified will determine the rate of duty applicable at the time of entry for home consumption. The time of entry for home consumption under section 45(2) is the time when the bill of entry is submitted. Under section 55(2)(b), an antidumping duty or countervailing duty or safeguard duty may be imposed from the date a provisional payment is imposed on the goods concerned.

How is the duty determined when goods are removed, taken, or delivered without due entry for home consumption?
If goods are removed, taken, or delivered without due entry for home consumption, duties are leviable in accordance with section 45(1)(b), which states that any dutiable goods imported into the Republic and which were removed, taken or delivered without due entry for home consumption having been made on such goods, shall be liable to such duties as may be leviable upon such goods at the time of such removal, taking or delivery or at the time of assessment by an officer, whichever yields the greater amount of duty.

What is the rate of duty on goods entered for home consumption out of a customs and excise storage warehouse?
Section 20(4)(a) determines that goods may be removed from a customs and excise storage warehouse upon due entry for home consumption and payment of any duty due on said goods. The rate of duty will be the rate applicable when due entry for home consumption is made out of the warehouse.

What should I do if I cannot prove that my liability for duty has ceased for goods entered for removal in bond?
If you cannot prove that your liability for duty has ceased in accordance with section 18, you are required to notify the Commissioner immediately and submit payment of duty and VAT payable under the Value-Added Tax Act, 1991, (VAT Act) together with such notification as if the goods were entered for home consumption on the date of entry for removal in bond.

Payment will not indemnify you against any fine or penalty provided for in the Act.

What are the implications if I do not notify the Commissioner or if the goods entered for removal in bond or entered for export out of a customs and excise warehouse are diverted?


If your liability has not ceased and you do not notify the Commissioner and pay the duty and VAT, or if the goods entered for removal in bond or entered for export out of a customs and excise warehouse has been diverted or deemed to have been diverted as contemplated in section 18(13), you shall, upon demand be required to pay:

• the duty and VAT due under the VAT Act, as if the goods were entered for home consumption on the date of entry for removal in bond;
• any amount that may be due under section 88(2) for goods subject to forfeiture that cannot be found;
• any interest due under section 105; and
• in certain circumstances, offenders may be liable for criminal prosecution.

What should I do if I cannot prove that my liability for duty has ceased for goods entered for export from a customs and excise warehouse?
If you cannot prove that your liability for duty has ceased in accordance with section 18A, you are required to notify the Commissioner immediately and submit payment of duty and VAT payable under the VAT Act, together with such notification as if the goods were entered for home consumption on the date of entry for export.

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