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By Surita Preller | Aug 15, 2021

In an attempt to make vehicles more affordable locally and boost sales, the duties on imported components of vehicles, aircraft, vessels and associated transport equipment can be rebated as if they are imported as parts of the unassembled vehicles in which they will be incorporated. In other words, before this change, the components attracted duty if they were imported separately, and didn’t attract duty if they were imported as part of an unassembled vehicle kit. Now they will attract no duty, irrespective of whether they are imported as part of a kit or as standalone imports.

Also, the full duty can now be rebated on assembled motor vehicles, entered as prototypes for use exclusively in the development or manufacture of new models, to the limit of two such vehicles per model, on the condition that the prototypes are not disposed of within a period of two years from the date of entry under this item. If you dispose of the prototype within 2 years, you need to pay the duty.

The extent of the refund on automotive components for specified motor vehicles is stated as “Not exceeding the duty applicable to such goods in Part 1 of Schedule No. 1 reduced to the extent of the amount reflected on the Production Rebate Certificate (PRC) issued in the name of the importer”.

The final in this series of amendments, is the amendment of Part 4 of Schedule No. 6 to the Act, to include the reference to rebate item 317.04, as a consequence to the implementation of Automotive Production Development Programme (APDP) Phase II.

Note 4 is substituted with the following:

“For the purposes of rebate items 680.04 and 680.05 a licensed special manufacturing warehouse (VS) must be registered in terms of rebate item 317.03, 317.04 or 317.07”

Rebate item 680.04 is for “New pneumatic tyres specified in environmental levy items 152.01 and 152.02, liable to the tyre levy in Part 3E of Schedule No. 1, which have been moved from a licensed manufacturing warehouse (VM) to a licensed special manufacturing warehouse (VS), for use in the manufacturing of vehicles.

Rebate item 680.05 is for “New pneumatic tyres specified in environmental levy items 152.01 and 152.02 which have been removed from a licensed special manufacturing warehouse (VS) after the environmental levy has been paid and are found to be off-specification or otherwise defective and are returned to the licensed manufactured warehouse (VM).”

A rebate of the full excise duty on both of the above items have been operational since 1 February 2017.

All of these changes are implemented with retrospective effect from 1 July 2021, in the hope that domestic sales of vehicles will be boosted and return to normal after the crippling effect on the industry due to the Covid-19 pandemic. Whether these attempts will succeed, remains to be seen.

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