Proof of payment is often required by SARS Customs in order to verify the correctness of invoice amounts.
[The SARS requirement for proof of payment is no longer aligned to the way that banks operate…]
Occasionally proof of payment from a bank can be hard to come by. I have seen companies work very hard, sweating in fact to obtain proof of payment from a bank thinking that this is the only option available.
The SARS Policy SC-DT-C-13 dated 27 November 2015 covering Refunds and Drawbacks offers the best description of what is required as proof of payment, namely… “from financial institution clearly indicating the beneficiary and the applicant, method of payment, currency transfer and invoice related to the transferred currency”. Most requests from SARS require this to be bank stamped and signed.
The SARS requirement for proof of payment is no longer aligned to the way that banks operate in this technologically advanced environment. Many banks do not print, stamp and sign the payment advice. Today, special arrangements must be made for this to happen. In addition, most companies today make bulk payments with long annexures of invoice amounts consolidated into one amount. This can get tricky as a method of proof.
Many companies make term payments, i.e. 60 x days or 90 x days from shipment date. I have seen companies make early payment in order to obtain some form of proof in order to expedite live shipments or refund applications with SARS. While there is nothing wrong with doing this, it does defeat the objective of the term payment in the first instance.
But, the objective of proof of payment has less to do with the payment advice and more to do with proving the value of the goods, namely the price paid or payable. There are other ways of proving the value of the goods namely:
- Proof of payment from a previous Customs clearance of identical goods (if already paid)
- Putting up a PP (Provisional Payment) as surety to SARS pending proof of payment
- Suppliers price lists proving the price of the goods to be paid
These can often be negotiated or discussed with SARS Officials, although the prerogative to accept these remain in the hands of SARS.