COVID-19 Concessions on Import Duty on Certain Goods
By Carla Bendeman, Nolands
On 15 March 2020, the Minister of Cooperative Governance and Traditional Affairs declared a national state of disaster in response to the COVID-19 pandemic. A customs duty rebate and/or a VAT exemption, as summarised below, became operational and provides for the relief of distress of persons impacted by the pandemic.
An exemption of VAT on essential goods imported is available to vendors and applies where items are not already exempt from VAT on importation.
These ‘essential goods’ are contained in paragraph A of Annexure B of Regulation R.398 of Government Gazette No 43148 of 25 March 2020 and include specific goods listed under the headings of Food, Cleaning and Hygiene Products, Medical, Fuel and Basic Goods.
The International Trade Administration Commission of South Africa (“ITAC”) issued a Certificate, valid from 30 March 2020 and will remain valid for the duration of the National Disaster, which certifies that goods listed in the regulation will automatically be exempt from VAT.
A full rebate of Customs duty and an import VAT exemption for “critical supplies” as listed by the ITAC can be claimed. Registered importers must apply to the ITAC for an import certificate via email which authorises the import of critical supplies under rebate item 412.11.
The ITAC-issued certificates are valid initially from 30 March to 31 May 2020. A significant number of critical supplies, particularly face masks and hand-sanitisers, were imported and thus the ITAC determined that there was no longer a shortage of these items and that new certificates will not be issued beyond 31 May 2020.
Given that the COVID-19 pandemic is still very much ongoing, it may be necessary to import critical supplies again if stocks fall short. Currently the ITAC is considering issuing rebate certificates, however, only to the extent that is has been demonstrated that there is insuffcient supply by domestic manufacturers. Thus, on 25 June 2020, the ITAC published draft Amended Guidelines for notice and comment.
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Nolands is an international auditing firm located in eleven offices in all major centres in Africa. Nolands employs almost 200 people and focuses on providing the best possible solutions for its clients. The company prides itself on being “not ordinary” and on its ability to integrate services and respond rapidly to clients’ needs.
Carla Bendeman is a Tax Trainee at Nolands. She completed her undergraduate studies in BCom Financial Sciences at the University of Pretoria and holds a BCom (Hons) in Tax from the University of Cape Town. She is currently completing her traineeship at Nolands to qualify as a Tax Advisor (SA).
Published: Indirect Taxes Newsletter, No. 11 Autumn 2020 l Photo: .shock - stock.adobe.com