Workshop on Tariffs

16 October 2019

Introduction:

Speaker:

Magda Hugo from Global Trade Solution

Topic:

Workshop on Tariffs

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Agenda

• Tariff Workshop• HS Code

• Inco Terms

• Country of Origin & Trade Agreements

• Valuation

• Customs Compliance

• Customs Update

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Tariff Workshop: What HS code mean?

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• The Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS) of tariff nomenclature is an internationally-standardised system of names and numbers to classify traded products.

Tariff Workshop: Harmonized System (HS) Code

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• The Harmonized System (HS) is a standard for naming traded

products, maintained by the World Customs Organization

• The first 6 digits are consistent at an international level

• Subsequent digits are country specific

• 21 Sections

• 96 Chapters

• approximately 5,300

article / product

descriptions

Tariff Workshop: What is the HS tariff classification number?

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• There are six digits in an HS code. You use an HS code because it is a universal classification tool. Many governments add additional digits to the HS number to further distinguish products in certain categories. These additional digits are typically different in every country

• An H.S. Tariff Classification Number is a 10 digit number that must be provided on the export and import declaration in order to communicate what is the good that is being exported or imported. Theoretically, every type of good is covered by the H.S. Tariff Classification Numbers and each good can be matched with a number

Tariff Workshop: Why is HS code required?

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• Challenges in Classification for Companies

• The acceptance and versatility of the HS code as a universal economic language and code for goods has made it an indispensable tool for international trade which is incorporated into many of the customs clearance systems around the world

Tariff Workshop: What are the main reasons for imposing a tariff?

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• Tariffs are generally imposed for one of four reasons:

• To protect newly established domestic industries from foreign competition

• To protect aging and inefficient domestic industries from foreign competition

• To protect domestic producers from "dumping" by foreign companies or governments….

• To raise revenue

Tariff Workshop: Who benefits from a tariff?

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• The benefits of tariffs are uneven. Because a tariff is a tax, the government will see increased revenue as imports enter the domestic market….. Domestic industries also benefit from a reduction in competition

Tariffing Workshop: Structure of HS

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Tariff Workshop: HS Classification Interpretation Rules

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Tariff Workshop: HS Code General Rules for Interpretation

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Tariffing: Tariff Book

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• Available in printed format or electronically in GTS

Tariff Workshop: Inco Terms 2020 is here…2010 still applicable

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Tariff Workshop: Incoterms and Customs Duties

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Tariffing Workshop: Country of Origin

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• Country of Origin – where product is manufacture

• Could qualify for Trade Agreements

Tariff Workshop: Customs Valuation

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• The value for export is the total cost to get the goods on board a vessel or truck to transport to the foreign destination

• If it is sold in a foreign currency then the value must be converted to ZAR based on the Customs exchange rate.

• A Unique Consignment Reference (UCR) Number is used to link the export consignments with the SA Reserve Bank

Tariff Workshop: Supporting Documents

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• Invoice

• Worksheet – showing value calculations

• Packing List

• Clearing Instruction or own Clearing

• Transport document • i.e. Road manifest, Bill of lading or Air waybill

• Tariff Information

Tariff Workshop: Supporting Documents to proof Export / Import

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VAT Compliance

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NCAP – New Customs Act Program

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GTS Overview

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NCAP – Useful links

• NCAP - http://www.sars.gov.za/ClientSegments/Customs-Excise/AboutCustoms/Pages/New-Customs-Legislation-update.aspx

• RCG - http://www.sars.gov.za/ClientSegments/Customs-Excise/AboutCustoms/Pages/Reporting-of-Conveyances-and-Goods.aspx

• CSK - http://www.sars.gov.za/ClientSegments/Customs-Excise/AboutCustoms/Pages/Customs-Sufficient-Knowledge-Test-FAQs.aspx

• Customs - http://www.sars.gov.za/ClientSegments/Customs-Excise/AboutCustoms/Pages/default.aspx

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SARS– Useful links

• Compliance- http://www.sars.gov.za/AllDocs/OpsDocs/Policies/SC-CF-55%20-%20Clearance%20Declaration%20-%20External%20Policy.pdf