On 07 April 2021, the South African revenue Service (SARS) announced the release of the Supreme Court of Appeal (SCA) judgement of the commissioner for SARS versus Levi Strauss SA (Pty) Ltd. The appeal was upheld with costs, Levi Strauss SA (Pty) Ltd having to pay SARS' costs. The determination and the demand for payment by SARS for the sums of R52,466,124.19 and R87,240,129.71 were set aside.
The judgement relates to whether goods consigned directly from one Southern African Development Community (SADC) member state to another member state, whether qualifying for favourable rate of duty in terms of Protocol, whether commission on purchases through a related company constituted buyer's commission, and whether royalties are due directly or indirectly as a condition of sale of the goods for export to South Africa
Customs and Excise Act, 1964; Section 49(7); appeal against origin determination; importation of goods from SADC countries; certificates of origin in terms of Annex I to Rules of Origin to the Protocol on Trade in the Southern African Development Community (SADC) Region; validity; goods produced in an SADC member state and sold to purchaser in non-member state; purchaser on-selling goods to an end user in a member state; goods dispatched by producer directly to end user; whether goods consigned directly from one member state to another member state; whether qualifying for favourable rate of duty in terms of Protocol; valuation of goods for purpose of calculating customs duty; determination of transaction value in terms of Sections 65, 66 and 67, read with Section 74A(1), of the Act, 1964; inclusion of commissions other than buyer's commission under Section 67(1)(a)(i) of the Act, 1964; what constitutes buyer's commission; international procurement process; manufacturing process under agent's control; scope of purchaser's control of agent; whether commission on purchases through a related company constituted buyer's commission; transaction value; inclusion of royalties in terms of Section 67(1)(c) of the Act, 1964; and whether royalties due directly or indirectly as a condition of sale of the goods for export to South Africa.
The judgement is available on request.
Story by: Riaan de Lange