With the popularity of various Internet shopping sites and digital communication platforms, the world has become smaller, and foreign suppliers have become more accessible to local buyers.

Anyone can log onto the Internet and search for the product they want to buy.  Chances are, they will be presented with a plethora of sellers to choose from.  Some of the importers are novices and aren’t always fully aware of the documentation SARS requires to evidence the sale.

In terms of section 39 of the Customs & Excise Act 91 of 1964 (“the Act”), when importing a product into South Africa, the importer must provide SARS, inter alia with the following documents:

• Transport document;
• Invoices;
• Shipper’s statement of expenses (relating to costs incurred by the importer);
• Confirmation of sale or contract of purchase evidencing the sale;
• Written clearing instruction.

Many importers conclude purchase and sale agreements with their foreign suppliers in an informal way, for example by way of text messages, or data calls.  Whilst, in law, verbal contracts are considered legally binding on both parties, for SARS’ purposes, any purchase and sale agreement must be committed to writing.

Section 102 of the Act puts the onus of proof on the importer.  In other words, it is the responsibility of the importer to prove to SARS that a valid transaction took place.  A key evidentiary document in this regard, is the purchase agreement.

Where importers have been unable to provide SARS with a purchase agreement, SARS has been known to reject the bill of entry, stating that no sale for export has taken place.  SARS use this allegation as motivation to seize the imported goods. 

Before SARS can officially seize the goods, it must first issue the importer with a letter of intent to seize, then allow the importer a reasonable time in which to argue why the goods should not be seized.  While all this is taking place, storage and demurrage costs are escalating.  SARS will consider the content of the importers response to the letter of intent to seize then issue the importer with a letter stating that because the importer could not prove beyond a shadow of a doubt that there was a bona fide sale between the parties, SARS has decided to seize the goods.

At this stage, the importer is beyond frustrated and has literally just thrown hundreds of thousands of rands away on the goods, storage, demurrage, and potentially legal costs.  The only way for the importer to recover his goods from SARS is to issue a section 89 notice read with section 96(1) of the Act.  Again… the costs continue to escalate.

If the importer proceeds to court, it will be a long and protracted process and if successful, there is a good chance that the cost to recover the goods from SARS and storage and demurrage costs far exceed the value of the goods.

Importers are urged to ensure that they keep proper records of each and every transaction entered into with their suppliers, from the negotiation of the price, through to receipt of the goods at the place of importation.