Quite simply, one may not clear goods moving in to or out of South Africa through Customs without the existence of a commercial invoice.
The new Customs legislation states that the contents of an invoice must be a “true reflection” of the goods being imported or exported.
This concept is important especially when dealing with samples of no commercial value, goods being supplied free of charge or replacement stock. Customs still wants to know what the goods are and what value such goods would be – as if in a commercial undertaking. The purpose obviously is to establish the correct duties and taxes which must be paid. Some of these issues will be discussed in the blogs which follow.
The concept a “true reflection” introduces another concept covered in the legislation namely, “the amount paid or payable” for the goods. The amount paid is the actual amount paid in the commercial transaction. The amount payable is the amount that would have being paid if any goods that were supplied at no charge were charged. The meaning of the concept “transaction value” is inclusive of the latter explanation; again, for duty purposes.
When it comes to duties, Customs wants its pound of flesh so to speak.
In a nutshell, whether the goods are charged for or supplied free of charge, or even discounted, a true reflection of the goods and their values must be present on the commercial invoice at all times.
Minimum requirements on a commercial invoice in terms of the Customs Control Act number 31 of 2014 and the SARS Valuations on Imports Guide (SC-CR-A-03) generally include:
a. Nature of the Transaction.
b. Goods to which it relates.
c. Amount (price) paid or payable.
e. Goods marks and numbers, i.e. part numbers.
f. Description of the goods.
g. Any propriety or trade name of goods.
h. Invoice number and date of issue.
i. Name and address of issuer.
j. Name and address of the buyer (and the consignee if different from the buyer).
k. Any commission, discount, cost, charge, expense, royalty, freight, tax, drawback, refund, rebate, remission or other information which affects the value of the goods.
l. Freight and insurance where applicable.
m. Must be in the official language.
n. Country of origin.
o. Weights and quantities.
p. Forward exchange contract particulars (for Rand invoicing).
The last invoice issued in respect of the goods must be supplied and used for clearance purposes, i.e. if there is more than one invoice issued for the goods. This would generally apply where buying and selling agents are involved.
Any change in invoice particulars must be accompanied by an amended invoice, debit or credit note. Such changes must be communicated to Customs with the use of a VOC (Voucher of Correction) if the goods have already being cleared.
Interestingly, the Customs Control Act makes mention of a “secret discount” in any form, a term not officially used before. These must also be reflected on the invoice.