Tariff classification determines the rate of duty payable on imported goods, and whether certain permits, quotas or trade preferences apply. A classification that looks like a minor technicality on the day of import can become a substantial liability once SARS reviews it, because the difference in duty is typically recoverable over a long period, together with interest and, in some cases, penalties.
How classification works
South Africa’s tariff is built on the internationally harmonised system. Goods are classified by applying the General Interpretative Rules in sequence, starting with the wording of the headings and the relevant Section and Chapter Notes. Explanatory Notes are persuasive but they do not override the legal text. Most disputes arise because the importer and SARS apply these rules to the same facts and reach different headings.
Where disputes tend to arise
Composite goods and sets, where several items are packaged together and it is unclear which gives the whole its essential character.
Parts and accessories, where the question is whether an item is a part of a machine or a separate product in its own right.
Multi-function products, such as devices that could fall under more than one heading depending on their principal function.
Products that have changed over time. A classification that was accepted for years can be revisited if the product is modified or SARS changes its approach.
Lessons for importers
Keep a classification file for each product. It should hold technical specifications, brochures, photographs or samples, and the reasoning for the heading chosen. When SARS queries a classification, the party with the better-documented position starts from a much stronger place.
Where the position is genuinely uncertain, consider applying for a tariff determination before importing. It is cheaper to resolve the question up front than to defend it on audit.
If SARS issues a determination you disagree with, act promptly. The remedies available are subject to strict time limits and procedural steps, and an importer who delays may lose the right to challenge.
Make sure your clearing agent understands the product. A declaration is only as accurate as the information the agent is given.
This article is general information only and does not constitute legal advice. The law may have changed since publication, and reading this article does not create an attorney-client relationship. Please consult an attorney about your specific circumstances.
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