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July 17, 2016

Rebate or drawback of the customs duty

In instances where a product is not produced or insufficiently produced
domestically or not produced in the required specifications as an
industrial or agricultural input for certain critical applications, a customs
duty waiver can be provided, allowing for exemption of duty on products
for which detailed separate tari lines are impracticable for tari
administration purposes.

These rebate provisions introduced by ITAC over the years for a variety of
products are standing rebate and drawback provisions
in schedules No. 3, 4 and 5 to the Customs and Excise Act and are
administered by SARS.
Schedule No. 3 makes provision for industrial rebates for manufacturing
purposes, allowing manufacturers, including the motor vehicle and
textile and clothing industries, to source their intermediate material and
component inputs at world prices.
Schedule No. 4 makes provision for products for which there are
temporary shortages on the domestic market, and generally also for
consumption and capital goods for which separate tari lines are not
feasible.
Schedule No. 5 is similar to Schedule 3 and 4, except that drawbacks
(refunds) of duties are provided for, not rebates, which requires that
duties are paid first and then refunded after an investigation by Customs.

A number of provisions in Schedule 3, 4 and to a lesser extent
Schedule 5 are introduced annually, whilst some are deleted when
they no longer serve the required purpose or if the duty has been
reduced in Part 1 of Schedule No.1 of the Customs and Excise Act,
1964. Approximately 10% to 12% of all imports enter the country
through the utilization of some or other rebate or drawback
provision.

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