A South African taxpayer wants to import goods into South Africa and then immediately export them again without even moving or changing the goods. He wants to put it into bond storage. Is it correct in saying that when it goes into bond storage you don't
Author: Alison van den Berg
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
“The short answer is YES - if they export the goods, the export invoice will be zero rated AND the customs duty and VAT in respect of the import are still not payable (or can as stated by the member, it be “disregarded due to it going into bond storage”). This is subject to their compliance with the legislation and rules though. Please ensure that the client that intends to import goods into a Customs and Excise Storage warehouse for re-export, is properly advised and assisted (even if by a service provider such as their clearing agent) to ensure they are properly registered, as is the bonded premises. They also need to ensure the goods are correctly entered and the relevant rules are complied with, and for example, that they may be required to give security to SARS. Reference should be had to the relevant sections 19 and 20 and their rules. Please note that in terms of the Act: “any liability for duty… shall cease when it is proved by the licensee concerned that the goods in question have been duly entered in terms of section 20 (4) and have been delivered or exported in terms of such entry. …If the licensee concerned fails to submit any such proof as is referred to within the period for which goods of that class or kind may be stored or kept in a customs and excise warehouse….he shall upon demand by the Controller forthwith pay the duty due on such goods…AND… …Except with the permission of the Commissioner…. no imported goods entered for storage ….shall be retained in any customs and excise warehouse for a period of more than two years from the time the imported goods were first entered for storage…” Therefore the requirements of acquittal must be complied with.