SARS Moves to Introduce Advance Ruling Fees

A SARS proposal to get importers to start paying for advanced rulings on import consignments looks set to face stiff opposition. 

The matter surfaced this week at a monthly meeting of the Cape Town Port Liaison Forum. 

The proposal comes in the form of a draft amendment to a section of the Customs and Excise Act dealing with Advanced Rulings, currently out for public comment – with comment due before November 4.   

SARS does not levy any payments on its services except for a 'Special Attendance fee' which does not apply to most importers. But the new proposed fee would apply to anybody seeking a SARS ruling ahead of their cargo arriving in SA, in cases where importers seek certainty over how SARS will classify their goods upon landing. 

The statutory framework for customs advance rulings (under the Customs and Excise Act) was previously legislated via amendments. However, the formal rules, application processes, and fee structures to operationalise the service have never been finalised or implemented. 

Previously, importers could seek informal or administrative determinations or classifications from SARS local offices or officials, but there was no comprehensive, formalised binding advance-ruling regime with structured application fees and hourly cost-recoveries. 

The proposed fees include: an application fee of R2500; (ii) a cost recovery fee of R650 per hour in relation to all non-urgent applications; and R1000 per hour in relation to urgent applications. Additional fees would be levied for other costs incurred by SARS, such as lab testing or technical analysis.  

The SARS proposal prompted opposition this week from multiple members of Cape Town's Port Liaison Forum, which has not yet taken a formal position on the matter. Some forum members said the fees would set a harmful precedent at a time when freight stakeholders already face severe economic headwinds. “Implementing a fee for advance rulings will open the door, allowing SARS to implement fees for other services,” said one freight stakeholder, adding that the move would contradict the SARS policy of facilitating trade. “Importers and exporters are already burdened with additional costs due directly to SARS interventions, and adding a cost for a service which is currently inefficient, should not be allowed.” 

PLF chairperson Terry Gale added his voice of concern: "As the SA economy cannot absorb any additional costs whatsoever and we need to work together. We have to import items that we cannot manufacture locally or cost effectively." 

Another stakeholder noted that the proposed additional cost came amidst existing frustration over service inefficiencies within SARS's tariff division. "Some tariff determinations are meant to take 90 days, but we're lucky if we get it within eight to nine months. Now we're going to be charged a fee for an inefficient service."  

The Southern African Association of Freight Forwarders has notified its members of the SARS proposal as part of a push for comment.  

SARS this week said it was seeking clarity on the matter in order to respond to queries. This story will be updated with their clarifying response.