On 28 March 2024, the South African Revenue Service (SARS) informed of the update of the 5-page “Ad Valorem Excise Duty – External Policy” and of its “Ad Valorem Value Determination – External Annexure”. Ad Valorem Excise Duty is payable on certain locally manufactured goods and goods imported of the same class or kind. Ad Valorem Excise Duty is determined in terms of Schedule No.1 Part 2B to the Customs and Excise Act, 1964, which specifies the goods on which duty is levied, each with its own applicable rate of duty. The policy and annexure have been updated to align with legislation.
SE-ADV-02 – Ad Valorem Excise Duty – External Policy
1 Purpose
a) The purpose of this policy is to outline the liability and obligations for Ad Valorem Excise Duty in terms of the Act, as amended, including Schedule No.1 in Part 2B to the Act, 1964 which specifies the goods on which duty is levied, each with its own applicable rate of duty.
b) The Ad Valorem Excise duty is payable on certain locally manufactured goods and imported goods of the same class or kind.
SE-ADV-02-A01 – Ad Valorem Value Determination – External Annexure
Excise External: Ad Valorem Excise Duty - Assessment Of Value And Calculations Formulae
Ad Valorem Excise duty due on all goods, except for the motor industry, is calculated on the invoice price paid or payable for the goods when:
i) Such goods are sold for home consumption in the ordinary course of trade;
ii) Such goods are sold in the condition and normal trade packing ready for sale in the retail trade;
iii) Such goods are sold to any buyers not deemed to be related as specified in Section 66(2)(a) of the Act, 1964 under fully competitive condition;
iv) The cost of packing and packages, and all other incidental expenses for delivery to the purchaser are included [excluding Value Added Tax (VAT) and the relevant Ad valorem Excise duty]; and
v) Considering that industries that qualify for deductions in terms of Rule 69.01 may deduct such from the invoice price.
c) Ad Valorem Excise duty due on motor vehicles is assessed on the ‘Recommended Retail Price’ (RRP) to the end user (excluding VAT and the relevant Ad valorem Excise duty).