On 25 March 2024, the South African Revenue Service (SARS) published its 23-page “The Excise Spirits Policy”, which has been updated to align:
- The outcome of a court case in SARS’s favour which confirmed that the absolute alcohol content of flavourings is dutiable.
- The legislation changes for Rebate Item 621.21.
- The legislative requirements for Rebate Item 624.50.
Purpose
a) The purpose of the Policy is to explain:
i) The activities that are permitted in the spirit warehouses;
ii) Completion of the DA260 account;
iii) The assessment of excise duty which involves duty paid removals and non-duty paid removals; and
iv) Reprocessing, destruction or abandonment.
b) The policy applies to role-players in the Spirits Industry.
Policy Statement
Liability for duty
a) Spirits manufactured from base products (e.g. grapes/wine, sugar cane/molasses, grain or other products) are liable for payment of Excise duty in South Africa.
b) The liability for Excise duty in the spirits industry is assessed and the duty collected on a duty at source (DAS) basis.
c) In terms of the Southern African Customs Union (SACU) agreement, the governments of South Africa, Botswana, Eswatini, Lesotho and Namibia (BELN) agreed, amongst other things, to broadly apply the same Excise duty principles to reduce trading and compliance costs for businesses within the SACU region.
d) The DAS system of assessing Excise duty and accounting for Excisable products, and its principles, is an example of such a commonly applied system / principle.
The “SE-SP-02 – Spirits – External Policy” is accessible at:
www.sars.gov.za/wp-content/uploads/Ops/Policies/SE-SP-02-Spirits-External-Policy.pdf