What you need to know about export duty on scrap metal
In 2020 South African legislation was changed so that export duties can be included in the various taxes imposed by SARS Customs. As of August 2021, South Africa levies duties on the export of scrap metal listed in Schedule 1 Part 6A of the Customs and Excise Act. Here’s what you need to know:
Export duty is exactly what it sounds like
Import duty, which we are generally familiar with, is levied on imported goods before it may enter South Africa to protect the competitiveness of locally produced products. Export duty is a mirrored version of import duty in that it is a tax levied before goods may leave South Africa for the benefit of our economy.
The purpose of export duty on scrap metal is to protect local industry
The objective of levying export duty on scrap metal is to provide South African foundries and mills with better access to higher quality and more affordable scrap metals in the local market. The intended result is that these mills and foundries become more competitive which in turn will attract investment, create employment, and support industrialisation.
The export duty is also set to discourage unfair trade practices within the domestic metals industry.
All scrap metal exports require Customs registration
Under normal circumstances, registering as an exporter with SARS Customs is mandatory if you export more than three (3) times per year, or export goods over the value of R150,000 per year. In the case of goods that incur export duty, there are no exemptions below these thresholds, so you must have an import export license regardless of how much or how often you export scrap metal. Click here to registered as an exporter.
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All exports of scrap metal require an ITAC permit
Export duties are assigned according to the tariff code classification relevant to the export. Without exception, tariff codes that are included in Schedule 1 Part 6A require a permit from ITAC before it may be exported. Failing to provide the relevant permit means the export will be detained at Customs until it is compliant.
To get an ITAC permit for your export, contact our permits department.
Preferential rates apply for scrap metal exports to trade agreement countries
If you are exporting to, for example, another SADC country, the export duty levied will be a preferential SADC rate, assuming a SADC certificate of origin accompanies the export.
The general rate and preferential rates of export duty are tabled in Schedule 1 Part 6A according to the relevant trade agreement or union. You can see the layout of the schedule in the example below and click the button to view the updated schedule and rates of export duty.
To claim a preferential export duty rate, the relevant certificate of origin must accompany the scrap metal export.
Export duty is payable before the export can happen
Exporters of scrap metal are required to self-assess the export duty payable on a shipment and settle the amount outstanding before a shipment may be processed. Customs will do a documentary check to confirm the amount paid is sufficient at the time of clearance.
The export may still be submitted via EDI.
Overpayment of export duty can be refunded
To claim a refund on export duty you’ll have to complete a DA494 form at a SARS branch.
This might be the first of many
Since our Customs legislation now provides for export duty, it can be applied to other industries besides scrap metal. However, this would only be viable for industries where the local supply and market price is adversely affected by exports.
Find more help with your import logistics, original resources, leading-edge training, and assistance with customs licenses on Trade Logistics.
