What is an application for a tariff determination?
Once SARS, at the branch office or audit level, determines or rather makes a decision that the tariff heading that an importer has used is incorrect, and instructs an importer to declare its goods in accordance with the decision by SARS, the proper manner to dispute such a decision is to make an application for a tariff determination.
When this application is made, it is submitted to the branch office that made the decision to instruct the importer to replace the tariff heading that it declared with the tariff heading the branch office requires. The branch office, in this case, does not deal with the application and submits it to the relevant department at the SARS head office who will then research the product, and makes a more informed decision.
We assist that office by preparing a fully detailed opinion on what we believe to be the appropriate tariff heading including providing SARS with samples and obtaining tests (if necessary), and have not to date had a tariff determination that was not decided in our client’s favour.
Once the tariff determination is received, the client keeps it on file for any future imports so that the issue does not arise again.
Access to previous tariff determinations
It is worth noting that in the South African context, SARS is not open about sharing the results of its previous determinations to allow for a free flow of goods into the country. Wouldn’t it be wonderful if an importer could simply google its product and obtain a previous determination already dealt with by SARS?
This is to be contrasted with the United States of America where tariff determinations can be requested before you actually import any goods (this does not apply to the current Customs and Excise Act but may apply when the new Act comes into force) and can easily be searched on the following website https://rulings.cbp.gov/home.
Contact us to simplify this minefield to ensure that your goods are properly classified to make your imports more efficient and cost effective.
By consulting with us and ensuring your documents are all in order prior to importing, it will lessen the risk of SARS querying your imports which result in delays and storage costs.
Should SARS still dispute any import (or export) by consulting with us it will reduce container standing time as the major legwork would have been completed prior to any import (or export) enabling a speedier resolution of any disputes raised by SARS.
A Case Study
We were recently instructed by a client whose clearing agent did not amend the bills of entry, by submitting a voucher of correction, pending a tariff determination, and our client was made to pay an excessive number of duties which were not payable. SARS had determined that our client’s product to contain nicotine when it clearly did not.
On our client requesting advice on how to recover the sum it had paid to SARS we advised client to proceed with an application for a tariff determination and then, if successful, to apply for a refund of the duties demanded by SARS. It is worth noting that the clearing agent advised that nothing could be done to resolve the matter.
On submitting the application to the branch office, which took some time as we had to trace the relevant officials as SARS was not forthcoming, SARS refused to accept the application raising spurious questions which did not apply.
We then threatened litigation through Section 96(1)(a) of the Customs and the Excise Act and SARS then accepted the application, albeit through a different process, as an internal appeal application.
Given the numerous delays by SARS, it was ultimately agreed that the product be tested at client’s expense, and together with the submissions made by our office SARS finally determined that the branch office was indeed incorrect, and that our client had properly declared its imported product, not as a product containing nicotine but as a flavorant with multiple uses in multiple industries. The branch office took a decision that as our client imported products for the vaping industry, the flavouring would include nicotine, which is patently untrue.
As an example of the quality of our work, the main documents filed with SARS and the relevant TDN can be found here .
