We have seeing allot of controversy in the recent past created by the need for freight statements. Why has this become so important?
It has to do with the costs, charges and expenses reflected on the commercial invoice. Charges are often deducted from the Customs value as non-dutiable charges. As usual, this affects the Customs value and hence, the duties and Vat payable. This was also discussed in the blog titled… “Terms of Sale on a Commercial Invoice”.
SARS Customs simply do not trust that the dutiable and non-dutiable charges specified on a commercial invoice, is the price that was ‘actually’ paid.
We often see charges such as freight and insurance specified on an invoice verified differently on a freight statement. This is because charges quoted at time of export are often based on estimated amounts. When the cargo is physically freighted, the actual amounts (which are occasionally different from the estimated amounts) become due; hence the need for a freight statement.
But, what is a freight statement? Where would you obtain them?
The SARS Policy number SC-CR-A-05 dated 24 January 2014 covering Method 1 Valuation on Imports refers to freight statements as… “third party invoices”, or a “transport document”, or a “specific freight statement from the international freight carrier or freight forwarder.”.
The Freight Forwarding Agent will most often have access to the freight statement for example, in the form of a HBL (House Bill of Lading). But this will depend on the charge, who directly contracts for the charge, and the mode of transport. Freight statements can be hard to come by. This happens when the Freight Forwarding Agent in the export country is different from the Agent in the import country. Freight amounts are very confidential. Most companies do not want to divulge such statements to third parties even though it is lawfully required by SARS. There are ways to overcome this problem but this level of depth is best left for another blog. You may also contact me via this blog to find out more.