CUSTOMS AND BORDER MANAGEMENT REFERENCE GUIDE CUSTOMS GENERAL REFUND ERRORS

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1 12 November20 CUSTOMS AND BORDER MANAGEMENT REFERENCE GUIDE CUSTOMS GENERAL REFUND ERRORS Revision: 88 Page 1 of 14

2 12 November20 TABLE OF CONTENTS 1 PURPOSE 3 2 SCOPE 3 3 REFERENCES Legislation Cross References 3 4 DEFINITIONS AND ACRONYMS 3 5 BACKGROUND 4 6 GOVERNING LEGISLATION 4 7 COMPLETION OF FORMS 5 8 PROOF OF EXPORT 6 9 VALUATION 7 TARIFF 8 11 VAT 8 12 PERMITS 9 13 SUBSTITUTION 9 14 RULES OF ORIGIN 15 ITEM / MIDP 17 TIME EXPIRED DOCUMENTATION REQUIREMENTS COMBINED TOTALS QUALITY RECORDS DOCUMENT MANAGEMENT 14 Revision: 88 Page 2 of 14

3 12 November20 1 PURPOSE a) In order to lower the high refund rejection rate, External Stakeholders are informed of the reasons why the refund / drawback applications are rejected by SARS. b) External Stakeholders are reminded that the turnaround time on refund / drawback applications are impacted by the high rejection rate. 2 SCOPE a) The document deals with errors that were detected upon checking refund / drawback applications in Head Office. b) Excise refund errors are excluded. 3 REFERENCES 3.1 Legislation TYPE OF REFERENCE REFERENCE Legislation and Rules Customs and Excise Act No. 91 of 1964: Sections 39-41, 43, 45,47, 54F, 58, administered by SARS: 75-76, 76B, 80, 91-92, 98-0, 1A Customs and Excise Rules: 39-41, 43-44, 49, 59, 75-76, 6 and Value-Added Tax Act No. 89 of 1991: Sections 7,11,13,16, 39, 40 and 54 Other Legislation: Promotion of Administration Justice Act No. 3 of 2000: Section 5 International Instruments: Kyoto Convention: General Annex: Chapter 4 Voucher of Correction, Repayment of duties and taxes - all WCO Framework of Standards: 4.18, 4.19, Cross References DOCUMENT # DOCUMENT TITLE APPLICABILITY SC-DT-C-04-A13 Completion of DA 66 All SC-DT-C-04-A25 Completion of DA 64 All SC-DT-C-04-A26 Completion of DA 63 All SC-DT-C-13 External Policy Refunds and Drawbacks All 4 DEFINITIONS AND ACRONYMS ATV EC ELG EUR 1 EWP FOB INCO terms IRCC ITAC OEM ROO SAA SADC TDCA THC VAT VOC VTE Added tax value European Communities Export of local goods Certificate of Origin South African / European Union Free Trade Agreement Examination without Prejudice Free On Board International commercial terms Industrial rebate credit certificate International Trade Administration Commission of South Africa Original equipment manufacturer Rules of origin South African Airways Southern African Development Community Trade Development Co-operation Agreement Terminal handling charges Value-Added Tax Voucher of Correction Value-Added Tax Exemption Revision: 88 Page 3 of 14

4 12 November20 5 BACKGROUND a) The turnaround time for processing refund claims is five (5) weeks from the date of receipt by a Branch Office. The rejection of refund / drawback applications will have an impact on the turnaround time. b) The onus ultimately rests on clients to ensure that refund / drawback applications are submitted within the prescribed periods in terms of Section 76(B) which came into effect on 24 January c) The Commissioner does not have discretionary powers to consider exceptional circumstances in the event of late submissions of refund or drawback applications or applications which become time expired due to the negligence of the client. d) The totals in the tables below are accumulative from 1 March 2005, although not all monthly figures are shown. e) In instances where an error has not occurred for the past six (6) months it is not displayed. However the total of these errors are still included in the accumulative totals. f) The current rejection rate is 16.99% 6 GOVERNING LEGISLATION a) Sections 75, 76 and 76B and the Rules thereto prescribe the conditions and the limitations under which a refund and drawback claim will be considered. b) Specifically Section 76B prescribes the period within which such applications must be received by the Controller / Branch Manager. Revision: 88 Page 4 of 14

5 12 November20 7 COMPLETION OF FORMS a) The physical street address and not the P.O. Box address must be inserted on page one (1) of the DA b) The importers name / customs code number on page one (1) of the DA 66 differs from the information reflected on the draft voucher of correction c) Amount claimed on page one (1) of the DA 66 does not correspond with amount claimed on draft voucher of correction / DA 63 / DA 64 / DA 494 / worksheet d) The indemnity fields (B 7 and B 8) on pages one (1) and two (2) of the DA 66 must be completed by the applicant e) The declaration in the grounds for claim field (B 8) on page two (2) of the DA 66 must be completed / signed originally by the applicant f) Motivation / grounds for claim (B 8) on page two (2) of the DA 66 are inadequate. The actual errors / circumstances giving rise to the claim must be clearly and concisely described g) SAD 500 (export) number and date on DA 63 is required. A copy of DA 63A inserting the export details must be pasted on three (3) of the DA h) DA 63A is required to delete the value-added tax (VAT) amount from the original DA i) All amendments must be initialled on the draft voucher of correction and all copies thereof j) Dual clearance particulars must be inserted in the endorsement field on the draft voucher of correction k) When a line number is amended, only the line number which is amended must appear on the draft voucher of correction and all copies thereof. The total number of lines being amended by the voucher of correction must be indicated in the field total lines l) The copy of the draft voucher of correction / DA 63 / DA 64 must be pasted to page three (3) of the DA m) The following information must be inserted on the various lines of the draft voucher of correction and all copies thereof: customs value, ATV and VAT n) The clearing agent must sign the declaration on the voucher of correction and all copies o) The customs code number does not correspond to the specific importer p) The amounts being claimed on page one (1) of the DA 66 must be shown separately, e.g. customs duty, antidumping, VAT, etc q) DA 70 required Revision: 88 Page 5 of 14

6 12 November20 8 PROOF OF EXPORT a) Bill of lading to be certified as an original true copy b) The shipped on board bill of lading to be signed and stamped by the vessel's agent c) Original proof of export is required. The endorsement by border officials on the SAD 500 (export) at port of exit is required d) The endorsement by the air carrier is required on the air waybill e) Bill of lading information included does not correspond with the SAD 500 (export) f) The serial number of the DA 73 must correspond with the serial number reflected on the reverse side of the SAD 500 (export) Revision: 88 Page 6 of 14

7 12 November20 9 VALUATION a) The following documentary evidence must be provided before the charges can be deducted from the customs value: i) Inland transport - hauliers invoice / specific freight statement ii) Rand invoicing - forward exchange contract or agreement iii) Finance cost / interest - financial agreement iv) Ocean freight - freight statement from vessels / shipping agent v) Insurance - insurance certificate vi) vii) Terminal handling charges (THC) - specific freight statement Buying commission - third party invoice / primary supplier's invoice and agreement viii) Unit price - published export price list ix) Discounts - discount structure, what type of discount? x) Original worksheet indicating how the declared customs value was arrived at xi) Packing list to verify lost of goods xii) Advance payment - proof of payment xiii) Amended worksheet to be produced b) Hauliers invoice or statement of charges from point of exworks to point of FOB should be produced c) A copy of distribution agreement / contract of sale must be included in claim Revision: 88 Page 7 of 14

8 EFFECTIVE DATE 12 November20 d) Credit notes or amended invoices must be reconcilable with the original invoice and a reason for issuing must be furnished by supplier e) Proof of payment from financial institution must clearly indicate beneficiary, applicant, method of payment, currency transfer and invoice related to transfer currency f) Commercial invoices in one of the official languages clearly indicating the currency used and the term of sale at the time of importation g) Clearing document for the last three consignments from the same supplier i.e. bill of entry, worksheet, supplier s invoice and air bill h) Invoice number reflected on claim worksheet does not correspond with invoice included in refund claim i) An amended invoice that clearly indicate breakdown and chargers which can be tied up with the original invoice j) VDN number and suppliers code number must be omitted TARIFF Sep - Aug - a) No sample received in this Office. Sample drawn under Customs supervision is required. If no sample can be produced, the agent is requested to submit specific descriptive literature cross referenced with invoice particulars for tariff classification purposes or apply for a tariff determination on a DA b) The literature produced with the claim cannot be tied up with the products invoiced c) Tariff heading correct as originally entered VAT a) The VAT amount on the draft voucher of correction must correspond with the VAT amount on the original declaration b) A letter of undertaking on an official letterhead from the clearing agent / importer confirming that they have not and will not claim input tax in future must be included in the claim c) Should be claimed back on VAT 201 return d) VAT cannot be claimed back twice Revision: 88 Page 8 of 14

12 November20 12 PERMITS a) Import / export declaration(s) do not fall within the period specified on the IRCC / ITAC 521.00 permit.

9 12 November20 12 PERMITS a) Import / export declaration(s) do not fall within the period specified on the IRCC / ITAC permit. Export period on the original permit received in this office differs from the export period on the permit notification letter included in the refund claim b) The quantity as claimed are in excess of the available balance of the permit c) The copy of the permit which is included in this claim must clearly be marked off on the back indicating under which tariff heading the goods were cleared on importation / exportation and which quantity was written off against that specific tariff d) Tariff heading used does not correspond with the permit e) DCC permit must be included in the refund claim f) Claimant must consult with ITAC for an amended permit g) Overclaim of FOB value / kilo's SUBSTITUTION a) Letter of authority reference number and date to substitute a declaration for another from Customs must be inserted in the endorsement field on the draft voucher of correction. A copy of the approval letter must be attached to page two (2) of DA 66. All the correspondence pertaining to this application for substitution must be included in refund claim Revision: 88 Page 9 of 14

10 EFFECTIVE DATE 12 November20 b) In the event of substituting one (1) declaration and the goods are no longer under Customs control an Examination without Prejudice is required (Rule 40 of the Act) c) The substitution declaration number and date must be reflected in the endorsement field on the voucher of correction d) The application for substitution was done after the prescribed period of six (6) months e) Certificate A should be included in the refund claim - disabled persons RULES OF ORIGIN a) The original EUR 1 certificate / SADC certificate / Form A is required b) EUR 1 certificate is in a foreign language. A translation is required c) Column 11 of EUR 1 certificate must reflect official stamp impression and signature of customs official in the country of exportation d) Invoice declarations as defined in Article 19 of Protocol 1 of SA / EU Trade Agreement is required e) The gross mass on the EUR 1 certificate differs from that on the import invoice / declaration f) The EUR 1 certificate / invoice number must correspond and / or inserted in the Additional Information field on the draft voucher of correction ITEM / a) Correspondence between importer and supplier explaining the matter of the faulty goods is required b) An undertaking by the supplier to accept the return of the goods must be produced (faulty goods) c) A letter of authority from SARS granting the client permission to export i.t.o. item / must be produced d) All claimants of drawback duties i.t.o. item 521 must be registered e) Incorrect information on DA MIDP a) The amount on the IRCC has been exceeded / incorrect b) Original Equipment Manufacturers Report to be signed and authenticated by Customs c) The refund application on the raw material / components does not fall within the provisions of the refund item Revision: 88 Page of 14

11 12 November20 17 TIME EXPIRED a) The claim is time expired as the date of the import declaration on which the claim is based is older than two (2) years DOCUMENTATION REQUIREMENTS a) The following documents are required to proof the claim: i) DA 74 / Original authorised release notification of the bill of entry ii) Destruction / abandonment certificate iii) DA b) Proof is required that DA 63 and SAD 500 (export) has been submitted simultaneously by the claimant c) A credit note must be produced as the quantity and value of the goods on the SAD 500 (export) has been amended on a SAD 504 and not on the export invoice d) A copy of the bond / rebate register must be included in the refund claim. Copy of the EWP report is required (PCI Team leader) e) A letter from the supplier is required to confirm which of the two submitted invoices are incorrect f) A letter of explanation from the shipper in respect of goods short shipped and a copy of manifest g) All the original commercial invoices and supporting documents i.e. declaration, worksheet, etc. are required Revision: 88 Page 11 of 14

12 EFFECTIVE DATE 12 November20 h) A letter of authority from A to B for claiming on their behalf is required (Section 0 of the Act) i) The SAD 500 (export) must be included in the claim and in date order j) Submission of a new duly completed DA66. The original DA 66 should be remain in the refund claim attached to page two (2) of the new DA COMBINED TOTALS Type of Error encountered Completion errors Proof of export Valuation Tariff VAT Permits Substitutions Rules of origin Item / MIDP Time Expired Documentation Total Revision: 88 Page 12 of 14

13 12 November20 Revision: 88 Page 13 of 14

14 12 November20 20 QUALITY RECORDS a) Completed forms as listed below Form Number Title CM 9 Change of name of company DA 63 Application for refund Export for Trade Purposes of Imported Duty Paid Goods DA 64 Application for Drawback DA 66 General Application for a Drawback / Refund DA 73 Application for Special / Extra Attendance DA 490 Departmental Bill of Entry DA 500 Bill of Entry (Direct) DA 550 Bill of Entry Export DA 554 Voucher of Correction FORM A / GSP Certificate of Origin Generalised System of Preferences Trade Agreement P1.154 Destruction certificate SAD 500 Customs Declaration form SAD 501 Customs Declaration form (Continuation Sheet) SAD 502 Customs Declaration form (Transit Control) SAD 503 Customs Declaration form (Bill of entry Query Notification / Voucher of Correction) 21 DOCUMENT MANAGEMENT Designation Name / Division Business Owner: Chief Officer: Customs and Border Managements Policy Owner: Group Executive: Customs Strategy and Policy Author: H Broodryk Detail of change from previous October 20 issue revision: Template number and revision SC-POL-TM-07 - Rev 4 Revision: 88 Page 14 of 14

CUSTOMS AND BORDER MANAGEMENT INTERNAL COMPLETION MANUAL DA 185 / DA 186

CUSTOMS AND BORDER MANAGEMENT INTERNAL COMPLETION MANUAL DA 185 / DA 186 Revision: 2 Page 1 of 26 TABLE OF CONTENTS 1 SCOPE 3 2 AUTHENTICATION VERIFICATIONS 4 3 EXISTING REGISTRANT / LICENSEE PARTICULARS